Residential Energy Credit Windows
April 30th, 2008
Question: Federal Tax Credits for Energy-Efficient Windows and Doors?
We are a residential contractor and have been receiving inquiries for replacement windows which meet the Federal Tax Credit Guidelines. We are aware of the Energy Performance ratings required, and understand that the Tax Credit is only on the cost of the windows and not the installation labor. We buy from our supplier at a cost, and mark-up that cost to our customer during the sale. My question is: Does my customer get a tax credit on what my firm paid for the window ( before mark-up) or do they receive the tax credit on the marked-up cost for the window?
Answer: If you buy the window at $400 and sell it for $600, the credit is 30% of the $600.
Please do *not* give any tax advice to your customers. Direct them to their preparer or the www.energystar.gov website.
I really detest breaking the news to elderly/poor people that since they *don’t* pay income taxes, the $1500 tax break the sales told them they’d get doesn’t apply to them.
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