You probably already know you can score tax credits for things like upgrading to more energy-efficient appliances and re-roofing your home, but did you know you can also cash in for replacing or adding residential skylights or blinds? The federal government offers a variety of incentives for switching to more eco-friendly and sustainable building materials, which can result in up to a 26 percent savings for simply improving the ambiance and efficiency of your home.
The passage of two important laws resulted in credits for purchase and installation of certain skylights, blinds and more. The Emergency Stabilization Act (2008) and the American Recovery and Reinvestment Act (2009) provide a substantial tax credit on both the purchase and installation of certain products in renewable technologies, namely solar, wind and geothermal energy. These acts were passed for two reasons — to restimulate the economy after the financial crisis of 2007-2008 and to help improve the environment.
How Much Are the Credits Worth?
So how much, exactly, can you get back by investing in solar skylights or blinds? It depends on what products you buy and when they are installed, but you can expect to recoup up to 26 percent on your purchase which will help offset costs so you can get the exact setup you want. Your savings will vary, but the average tax credit for a replacement solar skylight ranges from $330 to $480, whereas the average tax credit for a solar blind ranges from $540 to $720.
When you purchase and install your new items, they will have an impact on your total credit as well. As long as you have your skylights installed before the end of 2022, you can reap the benefit of the full 26 percent credit. However, if you wait until 2023 to get them, you’ll miss out on a four percent savings because the credit drops to just 22 percent. Depending on what brand or style of skylights you install, you might qualify for some ENERGY STAR tax credits as well.
26% FEDERAL TAX CREDIT
22% FEDERAL TAX CREDIT
What Can You Use Them On?
Certain VELUX products, including solar-powered skylights and room-darkening blinds, are classified as solar electric property and therefore qualify for credits.
The tax credit is available on solar skylights and accessories, such as skylight blinds, even if the solar accessory is purchased with a non-solar skylight. This includes solar-powered fresh air skylights as well as fixed or manual fresh air skylights with solar-powered blinds that are factory installed. It also includes Rigid Sun Tunnel skylights with solar night lights that came pre-installed. Solar blinds can be purchased with VELUX FS, FCM, VS, VSS, VCS, VCE and VCM models.
How to Cash in on Tax Credits
Whether you’ve already had your VELUX products installed or are planning to get them this year, it’s important you know exactly how to receive your tax credit once all is said and done. Always make sure to consult a tax professional for the best results. If you work with an accountant, let them know you qualify and they will help you submit the right forms.
- Keep your receipts for the total price paid (including the receipts for the products as well as invoices for installation) for one of the qualifying VELUX products.
- Attach your receipts to a completed Manufacturer’s Certificate Statement.
- At tax time, fill out IRS tax form 5695 (you will find it under “qualified solar electric property cost”) and submit it with your taxes.
- Enter the tax credit off form 5695 on your 1040 form.
Worth the Investment
The fact you can get a big savings on your tax bill for installing skylights or blinds is truly the icing on the cake in this situation. That’s because these new additions bring a massive amount of functionality, efficiency and joy to the place where you spend most of your time. They can help keep your home warm in the winter, cool in the summer and well-lit year-round. Plus, you simply can’t deny the appeal of bright, natural light streaming in from the sky.