Credit Limits

• Homeowners who purchase certified energy-efficient windows can take a limited credit for buying the windows. To qualify, taxpayers must have purchased the windows during 2009 and 2010. The windows must have been installed between Jan. 1, 2009, and Dec. 31, 2010. Taxpayers must install the energy-efficient windows as replacement windows in the taxpayer's main home. Taxpayers may not take advantage of these credits when purchasing windows for a newly constructed home, vacation home or investment property.
  
  

Credit Amount

• The tax credit is limited to 30 percent of the window replacement costs up to $1,500. The $1,500 total applies to both 2009 and 2010. Homeowners can spread the cost of the windows over the two tax years or use the entire credit amount in one year. Taxpayers who claim the entire $1,500 credit limit in one year may not take another credit in subsequent years. Additionally, the cost of installation and labor service fees do not count toward the tax credit.
  
  

Certification Rating

• Taxpayers must insert windows that have Solar Heat Gain Coefficient (SHGC) and U-Factor ratings of .30 or less. The SHGC rating describes a window's ability to block radiant sunlight. Windows with a lower SHGC rating block more radiant heat than windows with higher SHGC ratings. The standard SHGC range is 0 to 1. The U-Factor rating defines a window's ability to prevent escaping heat. Windows with lower U-Factor numbers are more energy-efficient. The standard U-Factor range is .20 to 1.20.
  
  

Types of Windows

• Taxpayers may use the credit to purchase replacement sliding glass doors, storm doors, skylights and storm windows. However, taxpayers must purchase the sliding glass doors between Jan. 1, 2009, and May 31, 2009, whereas the other windows must be placed in service between Jan. 1, 2009, and Dec. 31, 2010.
  
  

Required Forms

• Taxpayers must complete IRS Form 5695 and attach the Manufacturer's Certification Statement containing the U-factor rating and SHGC rating. Taxpayers attach the Form 5695 to their tax returns to receive the tax credit.