UPDATE ON STIMULUS BILL EFFECT ON
RESIDENTIAL TAX CREDIT FOR WINDOW FILMS
(Updated and published March 12, 2009)
Amount qualifying for
credit which was 10% of film cost up to maximum total credit of $500
is increased retroactively for qualifying window film installations
to January 1, 2009, to 30% of film cost up to maximum total credit
of $1,500. This credit is in addition to any credit used in
previous years.
The tax credits for
qualifying window film installations have been extended through the
end of 2010, but the stringency for installations to qualify became
more difficult beginning February 17, 2009.
Credits can only be taken
for installation of window film products certified by the product
manufacturer as qualifying for such credits. The consumer should be
instructed to check the manufacturer’s website and/or other
published information to verify the products being purchased do in
fact qualify. Effective February 17, 2009, many products which
previously may have qualified will not be listed as qualifying after
that date due to increases in stringency of energy efficiency
requirements for fenestration and insulation which go into effect at
that time, since the new standard for compliance for films will be
the 2009 International Energy Conservation Code (IECC).
All questions on whether
specific products and installations will qualify should be answered
by the window film manufacturer or its agents. The IWFA can only
answer general questions about the credit itself and not about
specific products or uses. In addition, the IWFA does not
offer legal tax advice to the industry or the public, so all
manufacturers and consumers should check with their own tax
professional or legal counsel for advice on their particular
situations.
WINDOW FILMS QUALIFY FOR
TAX CREDIT IN 2009
On October 3, 2008,
President Bush signed into law the “Emergency Economic Stabilization
Act of 2008.” This bill extended tax credits for energy efficient
home improvements (windows, doors, roofs, insulation, HVAC, and
non-solar water heaters). Tax credits for these residential
products, which had expired at the end of 2007, will now be
available for improvements made during 2009. However, improvements
made during 2008 are not eligible for a tax credit.
The home improvement tax credits
apply for improvements “placed in service” from January 1, 2009,
through December 31, 2009.
After a review of this legislation
and its implications for the window film industry, the International
Window Film Association (IWFA) has determined that window film again
may qualify for consideration for the tax credit. A description
below explains all the considerations. Of course, the IWFA cannot
give specific tax advice to any individual, so check with your tax
advisor if you have any questions about whether you qualify to use
this credit.
Window film qualifies as
“insulation”. The installed window film in combination with the
window on which it is installed must meet the 2000 IECC and
Amendments which would be the 2004 Supplement to the 2003 IECC.
Except for the change of date in the
“placed in service” requirement, this is the same criteria as for
the credit in 2006/2007 tax years.
Each window film manufacturer must
decide which of its products qualify for the credit when used in
each climate zone of the energy code listed above. A Manufacturer’s
Certification Statement must be made available to the taxpayer
(either by the installing dealer or manufacturer or from the
manufacturer’s website) who purchases the qualifying window film.
This statement and a copy of the invoice should be retained by the
taxpayer for his/her records, although it is not required to be
filed along with the IRS Form 5695 at the time of tax filing. To
find out which films qualify from a particular manufacturer, you
must check with that manufacturer or its representatives. No one
else can make the determination for the manufacturer of which
products it chooses to certify for the tax credit use.
If credit is claimed for a film which
does not have a Manufacturer’s Certification Statement, the taxpayer
may be charged and found guilty of committing tax fraud; the same
would be true of a manufacturer, distributor or dealer
misrepresenting that a certain product qualifies for the tax credit
when in fact it does not.
