Federal tax credits are a thing of the past – or so I thought.

On Dec. 18, 2015, Congress raised a few eyebrows, including my own, when it passed the PATH Act (H.R. 2029). When the bill (S185) was introduced in January 2015 by Sen. Orrin Hatch (R-Utah), there was no energy-savings incentive for doors and windows. Then, seemingly out of the blue, the new law reinstated a number of energy-saving incentives, including the 25C tax credit.

I was surprised to say the least. And it left me wondering: What impact will it truly have on the fenestration industry?

The reinstated 25C tax credit is for 10 percent of the cost of retrofit doors and windows up to $200 for windows and $500 for doors, not including installation costs, and is retroactive for 2015 and 2016. Tax credits were at this level prior to the ARRA tax stimulus when they jumped to 30 percent of the cost up to $1,500 per window, and then were lowered again to current levels in 2010.

I have always been a strong advocate for tax incentives. We’ve seen them make short-term impacts on sales, and recent studies have proven their value in terms of energy savings for homeowners. However, in this case, The View from Here is that the tax credit alone will not be enough to significantly stimulate sales of doors and windows.

But there are some positives.

First, it will likely stimulate interest in Energy Star-rated products, the new criteria to receive the credit. And second, we have to look at the reinstatement of 25C as a positive sign that our members of Congress do listen to our industry and work by individuals and the WDMA have kept the fenestration industry top of mind.

We can only win in Washington if we continue to collectively advocate for the health of our industry.

What’s your View? Email me directly at eric.jackson@quanex.com.

Leave a Reply

Your email address will not be published. Required fields are marked *