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Window Films to Get New Tax Credit Benefits and an Extension Through 2032

This past August, the Biden Administration announced the Inflation Reduction Act which included a plethora of different things from a focus on climate change and energy, to healthcare costs and prescription drugs. Hidden within the deal as well, however, are residential efficiency tax credits which have been extended through 2032, and that may apply to window films for taxpayers’ homes.

The New Credit

The IRS has stated that existing Non-Business Energy Property Tax Credits can be applied retroactively from 2022 through 2032. The annual tax credits are good for up to 30% of the cost of the improvement up to an annual maximum credit of $1,200.

Window films, which can easily be installed in a day or less can be seen to save about 5 to 10 percent of a building or home’s total energy bill. Most films, permanently stick to the existing glass windows and are designed to block 40 to 60 percent of room heat being lost through the glass. They can also reduce air conditioning costs by 30 percent during the cooling season.

“Window films are often the unsung hero when it comes to reducing carbon emissions as they reduce energy use and can be readily installed to upgrade existing windows as part of a building’s envelope,” said Darrell Smith, executive director of the International Window Film Association (IWFA). “Window films offer a cost-effective way to improve a home’s energy efficiency by reducing solar heat gain coming into the interior in summer, as well as helping to retain heat in winter,” added Smith.

Credit Amount

Under the existing rules of the IRS and the International Energy Conservation Code (IECC), window film qualifies as an insulation material or a system that is specifically and primarily designed to reduce heat loss or gain in a home. This provision provides taxpayers with a 10 percent tax credit with a lifetime maximum of $500. So, with this new law in place under the Inflation Reduction Act, it significantly increases the amount of the credit as well as extends it through 2032, as well as extends the offer to non-primary residences.

Wrap Up

There are certain income limitations under the IRA that may affect a homeowner’s eligibility and tax credits that may be used. Additionally, certain stipulations may prevent you from taking the credit.  Anyone who is looking to claim this credit is encouraged to speak with a trusted tax advisor before doing so.


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