Energy Tax Credit

[Frustrated-in-IL]

I have been looking at the Energy Star website and I cannot find the criteria for qualifications of the various items for the tax credit.  There is so much crap on the website but it seems to just dance around the info needed to determine if something qualifies.

At one point a few years back, there was a map for windows and doors based on the location installed but I cannot find that now either.  Can anyone point to a handy reference on these items?  Am I just looking in the wrong place?

[PATAX]

I haven't had one yet this year. In the past I would check quickfinder, taxbook, and/or US Master tax guide, and I would scrutinize client documentation. Hopefully that would be enough,  but like you said they have to make things complicated.

[Just-Lisa-Now-]

Someone else dropped this link, see if you can find your product and get the full specs

https://www.energystar.gov/productfinder/

[Frustrated-in-IL]

Yes, I have seen the product finder but quite frankly, it is useless.  Dancing around but never getting to the point.

A few years back, I printed out a map of the U.S. showing all the zones and columns for various U-factors and SHCG factors.  Sort of a "if the U-factor is this, then the SHGC needs to be this".  I went to the URL which was on the old map and, of course, it is a dead link now.

It is very difficult to do a good job for my clients if the info isn't available.  And in this case, it isn't them.  Who knows you need  you keep window stickers?  And even if you did keep them, how do I know whether those numbers qualify?  And trying to get it for windows or doors from the manufacturer after the fact?  Forget it.  Did the furnace bill of sale ever say how efficient it is?  Have you then tried to find on the furnace website the efficiency rating for that particular make and model?  All this stuff takes time.   Because of this lack of info or difficulty finding the info, I have been hoping every year that this credit would just die.  But it has more lives than a cat.  Over the past years, I have wasted more time trying to figure out if something qualifies or not.  The manufacturers websites are for the most part useless.  After 30 minutes or so I usually find my answer, which in 90% of the cases turns out to be that the window, door, hot water heater, etc. does not qualify.  And I end up not charging for that time.

I imagine some here just blow it off if the client doesn't have and cannot give definitive info that it qualifies.  I also imagine that some here just claim the credit just because the client states they got a new this or that.  And I see both sides of that, as I just want to get stuff done and move on.  The biggest reason the unfinished pile gets bigger in my office is unresolved energy credit issues by far.

I'm just wondering how much time if any others here spend trying to determine if an energy related item qualifies for the credit.

[IRonMaN]

I'll have a handful of them come in every year.  Furnaces don't tend to be an issue here.  The invoice they bring in 99.9% of the time provides the energy efficiency on it. The typical windows and doors that I see coming through usually cost an arm and a leg rather than the cheapies that are out there so I don't tend to spend a lot of time analyzing things.

[qbteachmt]

"Am I just looking in the wrong place?"

Yes, because you are asking about two different qualifications.

Not everything Energy Star is also IRS tax credit. It might be Energy-company credit or rebate, and it might be State credit or rebate.

You look at the IRS eligibility, and it will tell you a certification or level rating, such as SEER 16 or 85% minimum efficiency, or whatever. Then the specific purchase can be evaluated. Just having Energy Star doesn't give the quantitative info.

Most times, the seller will include the certification, if it meets whichever various requirements.

[Frustrated-in-IL]

@qbteachmt said:

"Am I just looking in the wrong place?"

Yes, because you are asking about two different qualifications.

Not everything Energy Star is also IRS tax credit. It might be Energy-company credit or rebate, and it might be State credit or rebate.

You look at the IRS eligibility, and it will tell you a certification or level rating, such as SEER 16 or 85% minimum efficiency, or whatever. Then the specific purchase can be evaluated. Just having Energy Star doesn't give the quantitative info.

I respectfully suggest you follow your own advice and actually look at the IRS eligibilty.  Please look at the Form 5695 instructions for doors and windows.  It says "...that meets the Energy Star program requirements" and "...that meet Energy Star certification requirements".

If you read my post, you will see I am looking for where these requirements are.  Clearly, for doors and windows, they are NOT where you say there are.  So again, the question is where does one look to find these requirements by the various regions?  Does anyone have an updated map?

[Frustrated-in-IL]

I did some additional research and it took some time to find the following.  If I am correct, the criteria on the windows changed in October 2023.  The following is what appears to be the criteria is for windows for Jan to Oct 2023:

https://www.energystar.gov/sites/default/files/asset/document/Residential%20Windows%20and%20SGD%20EN...

I can't say I have seen too many windows that meet this criteria.

So is this right?  And just as importantly, why the heck is it SOOO difficult to have the criteria summarized in a concise document? 

[qbteachmt]

"you follow your own advice and actually look at the IRS eligibilty."

Well, yes, that's what I did. As I noted: "Most times, the seller will include the certification, if it meets whichever various requirements."

And here is what the IRS tells you in the instructions for Form 5695:

https://www.irs.gov/instructions/i5695#en_US_2023_publink1000122131

"Manufacturer’s certification.

For purposes of taking the credit, you can rely on a manufacturer’s certification in writing that a building envelope component is an eligible building envelope component. Don't attach the certification to your return. Keep it for your records."

Things will drive you crazy, if you let them. It can be a short trip.

[Frustrated-in-IL]

Yes, I agree things will drive you crazy.  Like this energy credit.

The manufacturers certificate is like the gold standard here.  But the people who write this stuff do not live in the real world.  In theory, just have the certificate and you are done.  But the reality, at least with my clients and those of the preparers I network with, is that no one has the manufacturers certificate.  No one.  

I have asked clients to contact the seller to get the certificate and then after calling, they come back to me with a response of "We don't have a certificate but it qualifies" or the best one "You don't need a certificate".

In the case of a furnace, ac, or hot water heater, one can sometimes be found by doing some digging at the manufacturers website.  I usually don't even try on those items but rather I get the make and model and see if it meets the various qualification criteria for the item.

But doors and windows are another animal.  Who keeps the stickers?  Who knew to keep the stickers?  Today I got a receipt for a window installer saying 5 Marvin windows were installed. Client says they are energy efficient and swears salesmen said they qualify.  A little more digging resulted in a name , Elevate Casement, and a model 250.  Yet, from searching the product listing of qualifying items you can find through the links that Lisa provided above, there are pages upon pages of Marvin 250 windows.

The client doesn't know.  The salesmen usually say anything to make a sale.  The client thinks I have a cancelled check and new windows and that is good enough.

Maybe it will be better in a couple years when the client is to be provided some kind of identifying number for purposes of the credit.  But until that happens, I seem to be spending a lot of time chasing something that usually doesn't turn out too well in terms of qualifying.  

[qbteachmt]

There often are product listings or catalogs from which the client picks their colors, shapes, models, options (such as the few colors of roofing that qualified, a triple-glazed patio slider instead of a double-glazed, etc) and a lot of times, it's on the invoice or estimate for work. The other place to look is inside the window track or edge. Not the large stickers that get removed. If you are looking at used homes, always check the window casement insides for the production labels, to see the year. The same is true of toilets; the year and model are inside the tank, typically.

[Frustrated-in-IL]

I really hate this stupid credit.  So tonight, the client brings receipt which has brand of hot water heater abbreviated with model number.  I figure it out and look on website.  It says .72 efficient and I say no credit.  He calls installer and installer says "it is .80+".  I say it has to be at least .82.  Client says to installer "does it qualify?" while I know there is no way I am putting a credit on this return.  Installer finally admits it doesn't qualify.   Between looking it up and the installer call fiasco, 30 minutes wasted on this **bleep** thing!

But what about this?  Also today.  Client puts $3000 down on windows in September.  Windows are installed for and balance paid for in November.  Windows would have qualified if installed in September but because of the change to v7 on October 23rd, do not qualify on date installed in November.

IRC 25C talks about "paid or incurred" and "installed" during the tax year.  I can't discern which is controlling.

To make matters worse, while I have total paid, I do not have a breakdown between windows and labor/installation costs.

Did I mention I hate this **bleep** credit?

[qbteachmt]

"I really hate this stupid credit."

"Installer finally admits it doesn't qualify."

Imagine being Tesla. Right now, they are late issuing the newly-required certificates for car sales.

"I can't discern which is controlling."

Typically, it's "placed in service" and that was especially applicable when the supply chain was broken and all those windows were still on the ships at Long Beach Harbor, CA waiting to dock and offload.