As a home owner, you know the high costs associated with upgrading key components of your home. Windows and insulation are no exception – yet neglecting these upgrades can end up costing you a lot more time, money and headache down the line. Good news is, there are new tax credits coming that will allow you to take advantage of to reduce the cost of window replacement and insulation.
In fact, there are many home remodeling provisions included in the recently-enacted Inflation Reduction Act, creating federal tax credits for up to 30 percent of the costs associated with energy-efficient home improvements (the old credit was only 10 percent). Those credits include:
- Window replacement (up to $600)
- Door replacement (up to $500)
- Insulation (up to $1,600)
This is promising news for home owners who have been looking to make green improvements but have lacked the capital to do so. Such tax credits, when they take effect on January 1, 2023, will increase from a one-time credit of $500 to a yearly credit of $1,200, essentially making it possible to perform many upgrades over many years.
Households that earn between 80 percent and 150 percent of the median income for the area can receive 50 percent of the total project cost – up to individual limits and up to $14,000 in total. Households that pull in under 80 percent of the median income can regain 100 percent of the project cost.
Key Innovations
The Inflation Reduction Act was signed into law by President Biden back in August, and allocates $370 billion to combat climate change. Some of that money comes in the form of rebates and tax credits designed to help consumers save thousands when investing in energy-efficient appliances, windows and doors, insulation, electric vehicles and renewable electricity.
One key innovation of this Act refers to the transferrable credits for consumer purchases. Rather than being required to pay the full price of windows, doors and insulation up-front, claiming the credit only at tax return time, customers are now able to transfer the credit to another company (i.e., the installer or manufacturer) or a financing company they’re working with. The result? An immediate discount put in place to drive sales and offer consumers immediate incentives to incorporate green improvements.
As part of the Act, there is a $600 aggregate limit for windows and even skylights that meet the requirements of Energy Star, with other efficiency improvements including $250 for exterior doors (up to $500), $150 for home energy audits and up to $1,600 for weatherization such as insulation and sealing.
With these new generous tax credits in place, there’s never been a better time to add replacement windows, which, according to the U.S. Department of Energy, can lower household energy bills by up to 30 percent.
Contact Allstar Construction for Twin Cities Window Replacement
To learn more about tax credits on St. Paul and Minneapolis window replacement and insulation, get in touch with the team at Allstar Construction. We can pair you with the ideal windows and insulation in the Twin Cities necessary to make your home more energy efficient. Just contact us at (763) 297-5100.
