What’s better than replacing your old, drafty windows with brand-new, energy-efficient replacement windows, you ask? Well, how about getting paid to upgrade your home’s windows and save money on your energy bills?
That’s right—when you install energy-efficient windows and doors, you may be eligible to receive tax credits, rebates, or incentives. Before choosing replacement windows, read below to get all the nitty-gritty details and learn which Pella windows qualify for this tax credit.
What Is the Inflation Reduction Act of 2022?
The Inflation Reduction Act (IRA) is a law that was passed in 2022 to invest in domestic energy production while attempting to lower inflation. While all the details aren’t entirely essential to know, one provision in the act should catch homeowners’ attention—the new incentive for replacing old windows and doors with qualifying energy-efficient windows and doors in 2023.
The Inflation Reduction Act replaced the Nonbusiness Energy Property Credit, which expired in 2021 and was extended through 2022. With this former credit, homeowners could claim up to 10% of the cost of eligible energy-efficient products, including doors, windows, or skylights, with a $500 maximum lifetime claim. However, windows could only account for $200 of the $500.
This is why it’s such a relief that the Inflation Reduction Act passed—now, homeowners can earn thousands more in tax credits for energy-efficient window replacement.
Overview of the Residential Energy Credits Offered by the Inflation Reduction Act
Thanks to the Inflation Reduction Act, the guidelines for claiming an energy tax credit for new windows, doors, and skylights are now much more favorable for homeowners. Instead of 10%, homeowners can now claim 30% of the project cost for window and skylight installation with a $600 annual maximum and 30% for door installation with a $500 lifetime maximum. There is a maximum of $250 per door.
These new rules apply for all windows, skylights, and doors installed between January 1, 2023, and December 31, 2032, and only apply to the cost of the products, not the installation costs.
Though doors have a lifetime maximum, homeowners can claim up to $600 per year on eligible window improvements made until 2032 for a total of $6,000 if the full amount is claimed annually. This is much more generous than the $200 lifetime maximum that homeowners were previously eligible for under the Nonbusiness Energy Property Credit!
What Are the Qualifying Criteria?
This tax credit sounds pretty awesome, right? It’s not too difficult to qualify for, either—just be sure that your project meets the following criteria:
- Your home (or property) must be located in the United States.
- The improvements must be made to an existing home—not a new build.
- The eligible upgrades must be made to a primary residence—not a vacation home or investment property.
- You must file Form 5695 (Part II) with your tax return. Talk with your tax advisor about how to correctly file the form and how to maximize your benefit.
- Your replacement windows and doors must meet the energy efficiency standards relative to your home’s unique climate zone.
How Can I Find Qualifying Windows and Doors to Claim My Tax Credit?
As we mentioned, to qualify for the energy tax credit from the Inflation Reduction Act of 2022, homeowners must choose energy-efficient windows that meet specific ENERGY STAR guidelines during the year of installation. Replacement windows must be ranked “Most Efficient” by ENERGY STAR based on performance in several categories specific to your property’s climate zone—including U-factor and solar heat gain coefficient (SHGC).
You can view the full list here for 2023. The list is divided into window styles (vertical slider windows, horizontal slider windows, casement style windows, picture windows, and sliding doors). You’ll see the qualifying product lines from leading manufacturers when you click on each window style.
Which Pella Windows Qualify?
According to ENERGY STAR, Pella offers several product lines that quality for the residential energy tax credit, including:
- Vertical Sliders — 350 Series® Single Hung (Nail Fin), 350 Series Single Hung (Pocket Frame), 350 Series Double Hung (Nail Fin), 350 Series Double Hung (Pocket Frame), and Pella 250 Series® Single-Hung with Advanced Low-E
- Horizontal Sliders — 350 Series Sliding Window (Nail Fin), 350 Series Sliding Window (Pocket Frame), and Pella 250 Series Sliding Window with Advanced Low-E
- Casement Styles — Several windows in the Architect Series®, Lifestyle Series®, 350 Series, and 250 Series (see the full list here)
- Picture Styles — Several windows in the Lifestyle Series, 350 Series, 250 Series, and Pella Special Shapes (see the full list here)
- Sliding Glass Doors — Pella 350 Series Triple-Pane Sliding Patio Door
Remember that Indianapolis is in the North-Central Zone, so be sure the Pella window style you choose qualifies for this particular climate zone to qualify for the tax credit.
Start Earning Money Back on Your Window Replacement with JD Hostetter & Associates
JD Hostetter is proud to install dozens of Pella® window styles that can qualify you for up to $600 of energy tax credits per year—not to mention you’ll also save on utility bills with your brand-new, energy-efficient windows. Basically, energy-efficient replacement windows are an investment that keeps on giving!
JD Hostetter & Associates is a Pella Elite Platinum Certified Contractor (the highest level of certification from the manufacturer!), so you can rest assured that our teams are trained on installing replacement windows that last—another key to energy-efficient performance.
Learn more about the Pella window installation services we provide, and if you have any questions about which windows qualify for the tax credit, please reach out—we would love to steer you in the right direction!