When it comes to compiling tax returns, many property owners do not realize that certain improvements that are made or implemented can in fact net them some excellent tax returns – especially when it comes to making a building as energy-efficient as possible. Over the past few years, it has even been possible to obtain tax credits on window film that has been installed on many private homes and even some business properties.

Obtain Federal Tax Credit

The Energy Policy Act of 2005 has enabled millions of property owners to obtain federal tax credits after making certain energy improvements to their structures – this includes having window tinting installed. However, it is important for property owners to remember that there are a few terms and conditions associated with receiving the appropriate tax credit. The maximum tax credit that can be granted on window film will be an amount of $500, and this will not be allowed to be applied to the cost of installation – only materials installed qualify. The installation must also take place on existing properties; new construction and rental properties don’t qualify to receive a credit.

Documentation Required

Property owners will be entitled to receive as much as a 10% tax credit on their window film installation, provided that the correct documentation is completed at the time of filing their tax returns. IRS form 5695 will need to be filled out and submitted in conjunction with the property owner’s tax return. Copies of the window film supplier’s invoice will also need to be submitted; it is important to remember that information on this document will need to be clearly separated according to installation and material costs. A copy of the manufacturer’s certification information will also be needed to determine whether the products used do in fact qualify for the tax credit.

2 Ways to Save Money

Although the tax credit received for having the appropriate window film products is a once-off event, property owners often forget that they will also be saving money in another way over the long term in the form of reduced energy costs. Once window film has been installed, it is possible for a building’s overall energy costs to be reduced by as much as 85%, especially during the summer months – most window film products work by keeping excess heat as well as harmful UV rays outside, which helps reduce the need for air-conditioning substantially. Many property owners are able to make use of space fans for cooling after having energy-efficient window film installed.

Unlike many other energy-efficient products where the payback time is normally spread over more than 5 years, the cost of having window film installed can usually be recouped within 2 to 3 years at the most. When having window tinting installed, it is essential that the service be performed by an accredited company, as failure to do so could not only result in inferior products being used; it could prevent the appropriate tax credit request from being approved.