Tax Credit Information
Tax Credit Information for Minnesota Homeowners
Minnesota Exteriors proudly installs products that qualify for the $1500 tax credit including:
- Andersen Windows Eco Excel package
- WeatherShield Windows
- Vista Windows
- Donlin Doors
- Edco Steel Roofing
How has the new economic stimulus bill affected the tax credits for energy efficient home improvements in Minnesota?
Minnesota Exteriors wants all Minnesota homeowners to be aware of significant changes to the tax code that took effect as a part of the recent Economic Stimulus Bill that was signed into law by President Obama on February 17, 2009. This law increases the tax credits for eligible replacement windows, doors and steel roofing installations made between now and December 31, 2010.
Who gets it?
Individuals who install specific energy-efficient home improvements qualify for the credit. All the improvements must be installed on or in the taxpayer’s principal residence in the United States. Condo and co-op improvements are apportioned to the owners.
What energy-efficient home improvements available from Minnesota Exteriors are eligible?
- Exterior windows including skylights and storm windows. The windows must meet or exceed both a U Factor and SHGC criteria of less than or equal to .30. (In general, only some Energy Star rated windows qualify).
- Exterior doors including door/storm door combos that meet or exceed both a U Factor and SHGC criteria of less than or equal to .30.
- Energy Star rated steel roofs.
To be eligible for the federal tax credits, the windows, doors and roofs installed must be expected to last 5 years, which can be demonstrated with a two-year warranty.
How much is the credit?
The tax credit amount is currently 30% of the product cost of the energy-efficient improvement measures for windows, doors, roofs and other parts of the building “shell”. There is a total lifetime cap on the credit amount of $1,500. Thus, the credit applies to up to $5,000 in total product costs.
When is it available?
The home improvements tax credit applies to improvements “placed in service” from January 1, 2009 through December 31, 2010. The IRS defines “placed in service” as when the products or materials are ready and available for use. This would generally refer to the installation, not the purchase.
What do I need to do to get the tax credit?
Homeowners will need to file IRS Form 5695 with your taxes. In addition, you will need to keep receipts proving that you purchased the improvements and a copy of the manufacturer’s certification. According to the EnergyStar.gov website, the 2009 version of the IRS form 5695 will be available in late 2009 or early 2010.
What is a tax credit?
You don’t receive an income tax credit when you buy the product as you would with an instant rebate. You claim the credit on your federal income tax form at the end of the year. The credit then increases the tax refund you receive or decreases the amount you have to pay.
Tax credits vs. tax deductions: In general, a tax credit is more valuable than a similar tax deduction. A tax credit reduces the tax you pay, dollar-for-dollar. Tax deductions, like those for home mortgages and charitable giving, lower your taxable income. If you are in the highest 35% tax bracket, the income tax you pay is reduced by 35% of the value of a tax deduction. But a tax credit reduces you federal income tax by 100% of the amount of the credit.
To learn more about how you can take advantage of the tax credits offered to homeowners by the Economic Stimulus Bill please fill out the contact form or call us at 763-515-4851.
Minnesota Exteriors is not a tax advisor. Please contact your accountants or tax advisor to receive personal guidance.
