Are Window Replacements Tax Deductible in 2025?

Replacing windows in your home can improve energy efficiency and comfort, and it may also help you save on taxes. Here's an updated guide on how you can take advantage of tax credits for window replacements this 2025.

‍

Energy-Efficient Home Improvement Credit

The federal government provides a tax credit for homeowners who make energy-efficient upgrades, including replacing windows. For improvements made from 2023 to 2032, you can get a credit equal to 30% of the cost of qualified energy-efficient improvements, such as windows, with a maximum annual credit of $1,200. This annual limit is broken down as follows:

• $1,100: For energy-efficient windows, doors, insulation, and other qualifying improvements.

• $2,000: For specific appliances, like heat pumps, heat pump water heaters, and biomass stoves.

This means if you replace your windows with energy-efficient models, you can claim 30% of the cost, up to $1,100 per year. However, be aware that starting in 2025, the windows must meet specific criteria set by the IRS to qualify for the credit. You will also need to report the Product Identification Number (PIN) for each qualifying item on your tax return.

Residential Clean Energy Credit

In addition to the Energy-Efficient Home Improvement Credit, there is also the Residential Clean Energy Credit. This credit provides a 30% tax credit for the cost of installing renewable energy systems, such as solar panels, wind turbines, and geothermal heat pumps. This credit is available through 2032, and then it will decrease as follows:

• 2033: 26% credit

• 2034: 22% credit

Unlike the Energy-Efficient Home Improvement Credit, the Residential Clean Energy Credit does not have an annual limit, so you can claim the full 30% of qualifying expenses each year.

‍

How to Claim the Credits

To claim these credits, you need to file IRS Form 5695 with your tax return for the year in which the improvements were made. Be sure to keep all receipts and documentation that show the products meet the required energy efficiency standards.

‍

Additional Considerations

• State Incentives: Some states offer additional rebates or credits for energy-efficient home improvements. It’s a good idea to check with your state's energy department or tax authority to see what programs are available.

• Consult a Tax Professional: Tax laws can be complicated and change over time, so it’s a good idea to consult with a tax professional. They can help you maximize the available benefits and make sure you're complying with all current regulations.

Conclusion

Upgrading your windows to energy-efficient models can provide both environmental and financial benefits. By understanding and utilizing the available tax credits, you can reduce your tax liability while improving your home’s energy efficiency. Just make sure the products meet the required standards, keep your receipts, and consult with a tax professional to make sure you're making the most of these incentives. Ready to upgrade your windows and save? Get a free quote now.

‍