Is the 2010 energy star tax credit (for windows and doors) actually cash back?
July 12, 2010 by admin
Filed under Other Energy News
I’m looking at replacement windows, and trying to determine if I should buy before the end of 2010 because of the energy star tax credit. I don’t know if this just means that the dollar amount comes off my adjusted gross income, or if means I will receive up to a $1500.00 check.
No it does not come off of your adjusted gross income. A tax credit is subtracted from the amount that you owe in taxes.
A tax credit is money that is taken off of the taxes, after you’ve calculated how much taxes you would owe for the year.
So, let’s say you had a $500 tax credit for the year, and had a total tax of $4,500, but $3,500 was taken out of your paycheck during the year.
$4,250 – $3,500 = $750 taxes you still owe.
$750 – $500 = $250 (subtract the amount of the tax credit from your total tax owed
Therefore, you’d owe $250 to the IRS.
Something else you might like to know is that you have to spend $5,000 (or more) to get the full tax credit. The reason is because it is a 30% of the amount you spent on the necessary replacement windows, etc.