As homeowners look for ways to improve energy efficiency and reduce utility costs, many wonder if installing a new garage door qualifies for an energy tax credit. The U.S. government offers various incentives for energy-efficient home improvements, but not all products meet the criteria for tax benefits. Let’s weigh in on do garage doors qualify for energy tax credit.
In this article, we will explore whether garage doors qualify for an energy tax credit, the eligibility requirements set by the Internal Revenue Service (IRS), and how homeowners can take advantage of these tax-saving opportunities.
Understanding the Energy Tax Credit
The Energy Efficient Home Improvement Credit is a federal tax incentive designed to encourage homeowners to invest in energy-efficient upgrades. This credit allows homeowners to claim a percentage of qualifying improvement costs, reducing their overall tax liability.
Under the Inflation Reduction Act of 2022, the previous Nonbusiness Energy Property Credit was extended and expanded, allowing homeowners to claim up to 30% of qualifying costs, with a maximum credit of $1,200 per year for eligible improvements.
Do Garage Doors Qualify for the Energy Tax Credit?
Garage doors can qualify for an energy tax credit if they meet specific requirements set by the IRS and the Department of Energy (DOE). The key criteria include:
- High Insulation Value – The garage door must have a minimum insulation rating (R-value) that meets energy efficiency standards. The exact R-value requirement varies based on geographic location.
- Weather Sealing and Heat Reduction – The garage door must include proper weather stripping and sealing to reduce air leaks and heat loss.
- Installed on a Primary Residence – The credit only applies to garage doors installed on a taxpayer’s primary residence (not rental or investment properties).
- Certified by ENERGY STAR® or a Recognized Efficiency Program – The garage door must meet the guidelines of an energy-efficient product certification program such as ENERGY STAR®.
While garage doors alone do not typically provide significant energy savings, those that improve home insulation and reduce heat loss through attached garages may qualify for a credit.
How Much Can You Claim for an Energy-Efficient Garage Door?
If a garage door meets the energy efficiency requirements, homeowners can claim 30% of the cost of materials, up to a maximum of $500 for all exterior doors combined. Labor and installation costs are not included in the credit.
For example, if a homeowner spends $1,500 on a qualifying garage door, they may be eligible for a $450 tax credit (30% of $1,500). However, if they also replace other exterior doors within the same tax year, the total combined credit cannot exceed $500.
How to Claim the Energy Tax Credit for a Garage Door
To claim the Energy Efficient Home Improvement Credit, homeowners must:
- Obtain Manufacturer Certification – Keep a copy of the manufacturer’s certification statement, which verifies that the garage door meets IRS energy efficiency standards.
- Keep Purchase Receipts – Maintain proof of purchase, including itemized receipts that show the cost of the garage door.
- File IRS Form 5695 – Report the qualified expense on Form 5695 (Residential Energy Credits) when filing taxes. This form is submitted along with Form 1040 on the homeowner’s tax return.
The credit reduces tax liability dollar-for-dollar, meaning it can directly lower the amount of taxes owed. However, it cannot be refunded if the credit exceeds the total tax bill.
State and Local Incentives for Energy-Efficient Garage Doors
In addition to the federal tax credit, some states and local utility companies offer rebates and incentives for energy-efficient home improvements. These programs vary by location and may provide additional savings beyond the federal credit.
Homeowners can check with their state energy office (Energy.gov), utility providers, or local government websites to see if additional incentives are available.
Does Replacing a Garage Door Increase Home Value?
While tax credits provide a short-term financial benefit, upgrading to an energy-efficient garage door can also increase home value and reduce energy costs over time. According to the National Association of Realtors (NAR), replacing a garage door has an average return on investment (ROI) of over 90%, making it one of the best home improvements for resale value.
Additionally, insulated garage doors help maintain indoor temperatures, reducing heating and cooling costs, especially for homes with attached garages.
Conclusion
Garage doors can qualify for an energy tax credit if they meet IRS requirements for insulation, weather sealing, and energy efficiency. Homeowners who install an eligible garage door can claim 30% of the cost (up to $500) by filing Form 5695 with their tax return.
Beyond tax savings, investing in an energy-efficient garage door can improve home comfort, reduce utility bills, and enhance property value. To learn more about energy tax credits and financial planning, visit ELVT Financial.
