Window Film Tax Credit: How to Qualify and Claim

The federal government provides a tax incentive for homeowners who invest in energy-efficient upgrades, including specific types of window film. This incentive, known as the Energy Efficient Home Improvement Credit, was expanded by the Inflation Reduction Act. It is a non-refundable credit, meaning it can lower or eliminate your tax bill, but you will not receive any of it back as a refund beyond your liability. This program extends through 2032.

Homeowner and Property Qualifications

To be eligible for the window film tax credit, the property where the film is installed must be an existing home that you own and use as your principal residence. A principal residence is the home you live in for most of the year; it cannot be a vacation home or a property you rent out to others. The dwelling must be located in the United States. This credit is for improving existing homes and does not apply to newly constructed properties or renters.

Qualifying Window Film Requirements

For window film to be eligible for the tax credit, it must be considered an insulation material specifically and primarily designed to reduce heat gain or loss in a home. The film must be installed on the windows of your home and be reasonably expected to remain in use for at least five years. You are not required to install film on every window to qualify; you can claim the credit for any amount of qualifying film you purchase and install.

Calculating the Credit Amount

The Energy Efficient Home Improvement Credit allows you to claim 30% of the cost of the qualifying window film itself. This percentage is applied only to the price of the material, not the expenses associated with installation labor. Your purchase invoice should clearly separate the cost of the film from the labor charges to properly calculate the credit.

There are annual limits on the total amount of credit you can claim. For all combined energy-efficient home improvements, the general annual cap is $1,200. Within this overall limit, there is a specific, lower sub-limit of $600 per year for exterior windows, which includes window films. For example, if you spent $2,500 on qualifying window film, 30% of that cost is $750. However, due to the $600 annual cap for this category, your credit would be limited to $600 for that year.

Required Documentation and Form Preparation

Before you can claim the credit, you must gather specific documents. You will need the purchase receipts or invoices that itemize the cost of the window film, showing it as a separate line item from any installation labor charges. You must also have the Manufacturer’s Certification Statement for the exact product you had installed.

The credit is claimed by completing and filing IRS Form 5695, Residential Energy Credits. This form is used to calculate the total amount of your energy-related credits. When filling out the form, you will enter the cost of the window film material, excluding labor, on the line designated for building envelope components.

How to Claim the Credit

Once you have accurately completed Form 5695, you must submit it with your annual federal income tax return, Form 1040. The total credit amount calculated on Form 5695 is carried over to Schedule 3 (Form 1040), where the credit is applied against your tax liability for the year. Using tax software will typically handle this transfer automatically. After filing your return, it is important to keep all your related records for at least three years. These documents serve as proof of your eligibility for the credit in the event the IRS has questions.