Window Replacement Tax Credit in 2023

If you’re considering new windows in 2023, you need to know about this year’s new window replacement tax credit.

The 2023 federal income tax credits offer incentives for homeowners looking to transition to a more energy efficient home. Take advantage of these tax credits, and you could save thousands on your new windows this year!

Keep reading to find out how.

What Are the New Tax Credits?

The Inflation Reduction Act of 2022 provides federal tax credits and deductions for homeowners, builders, and commercial property owners to make their homes and buildings more energy-efficient.

These tax credits provide up to $3,200 annually—which could lower the cost of energy efficient home upgrades up to 30 percent. (The limit is $1,200 a year for renovations, and $2,000 for appliances.) These upgrades include things like more efficient insulation, heat pumps, heat pump water heaters, electric panel upgrades, doors, and windows.

The annual limit for exterior windows and skylights is $600, while the limit for exterior doors is $250 for one door or $500 for all doors.

On top of the income tax credits offered, homeowners can also take advantage of the Residential Clean Energy credit. This credit provides an income tax credit of 30 percent for clean energy (like wind energy, rooftop solar panels, geothermal heat pumps, etc).

These tax credits will be available yearly through 2032.

The credit doesn’t have a lifetime limit, so you can claim the credit every year you make eligible improvements or buy eligible appliances until 2033.

This is a great option for homeowners looking to space out their home improvements. Since new windows aren’t a trivial expense, many homeowners don’t replace all their windows at once. If you need all new windows, you can do a few a year to take advantage of tax savings.

Why Choose Energy Efficient Windows?

Windows don’t just let light through: they also let heat and solar energy through the glass. Plus, air can flow through any cracks in the windows (particularly in old windows). When there’s a lot of heat transfer and air flow, it means the window isn’t very energy efficient.

Old, single-pane windows aren’t very energy efficient. Made with just a single pane of glass, they let in lots of heat and air.

Today’s windows, however, are much more energy efficient. Double-pane or triple-pane windows are made with several panes of glass and insulating gas sandwiched between the panes. The extra pane and insulating gas keep heat and air transfer lower.

Inefficient windows translate to higher energy bills. You’ll need to crank the heating in the winter and the air conditioning in the summer to compensate for the heat and air transfer through the windows.

As a result, new energy efficient windows don’t just help the environment: they also save you money, year after year, on your heating and cooling costs.

How to Claim the Tax Credit

To take advantage of these tax credits, you claim them when you file your taxes. You’ll need to fill out a form (Form 5695 for homeowners) to claim the credit. Your tax professional can help with your questions when you file.

In order to claim the credit, your windows need to have been installed—not just purchased—in the year you’re filing.

The tax credit can increase your tax refund or reduce your taxable income.

Call Us Today

If you’re considering new windows, we’re here to help!

Jack’s Glass has extensive experience helping homeowners just like you with exceptional window repair, replacement, and installation. Call us today to learn what we can do for you.