Legislation would extend 25C tax credit

[Washington, D.C.] - Legislation was introduced yesterday in the U.S. House of Representatives that would reform the residential energy efficiency (25C) tax credit and spur home owners to make energy efficient improvements, which is supported by the Window and Door Manufacturers Association. The Home Energy Savings Act (H.R. 6398) was introduced by Reps. Jim Gerlach (R-PA) and Richard Neal (D-MA), who are both members of the House Committee on Ways and Means. WDMA has been working toward introducing legislation to extend and reform the 25C tax credit that expired at the end of 2011.


"The 25C tax credit stimulates job creation in the vital manufacturing and construction industries and leads to reduced energy consumption for home owners," said WDMA President Michael O'Brien. "It has a proven record and helps home owners of existing homes afford higher efficiency products such as windows, doors, and skylights."


As introduced, H.R. 6398 would make the credit permanent for the first time. While it would initially extend the credit at the 2011 levels of 10 percent (up to $200) for windows and skylights and 10 percent (up to $500) for doors through 2013, beginning in 2014, the credit would expand to 10 percent (up to $1,000) for all qualifying products, including ENERGY STAR windows, doors, and skylights. Labor costs associated with the installation of windows, doors and skylights would also be eligible for the credit for the first time beginning in 2014. In August, the Senate Committee on Finance passed a bill that would extend the 25C tax credit at the 2011 levels through 2013.


2009 data from the Internal Revenue Service shows the 25C tax credit helped Americans invest $25.1 billion on remodeling and efficiency upgrades. That year, 67 percent of taxpayers claiming the credit had an adjusted gross income of under $100,000. In addition, according to analysis from the National Association of Home Builders, in 2009 the program supported 278,610 jobs, approximately $13.2 billion in wages, and $7.5 billion in net business income.


The 25C tax credit took effect in 2006 to boost energy efficient improvements for existing homes, and benefits consumers by allowing them to choose from a menu of energy efficiency options and determine which product works best for their needs.


"The window and door retrofit market has been key to sustaining the industry and preserving jobs during the prolonged housing downturn, and we appreciate the work of Reps. Gerlach and Neal in introducing this legislation," added O'Brien.


WDMA has made H.R. 6398 a top legislative priority and is working on passage of the legislation.