There's a new page in the songbook your company should be singing about: energy-efficient windows. The Energy Policy Act of 2005, passed into law last year, includes a tax credit equal to 10% of expenditures toward energy-efficient home improvements. Windows are capped at a $200 maximum benefit.
Qualifications To qualify, a window must meet or exceed the criteria of the 2000 International Energy Conservation Code (IECC) and must be installed in the taxpayer's main home in the U.S. Manufacturers are encouraged to provide certificates stating which of their products are qualified, but the simplest guarantee is an Energy Star rating.
Homeowners are responsible for keeping documentation of their qualified windows, but do not need to submit proof with their tax return. Because it's a tax credit and not a deduction, homeowners will pocket the full $200 value. Qualified products must be installed in 2006 or 2007 to claim this tax credit.
Marketing Advantage Many contractors are disappointed that the benefit is capped at $200 and complain that this is a pittance when weighed against their average window ticket. That doesn't matter — the key here is to make hay, not to worry about the amount. Here are some ways to get the word out:
Promote the benefit. Simple as it may seem, window replacement contractors need to work this benefit into their marketing message in all media.
Create excitement. If you're disappointed in the amount, then double or triple it. Offer matching funds or an “instant rebate” to augment the tax credit, and use this as a closing tool.
Use the press. Stories about tax credits are likely to get picked up by your local media. Present yourself as an expert who can help homeowners understand and qualify for this new benefit. Issue a press release, call in to local radio shows featuring financial advice, and send a letter to tax accountants in your area.
Don't let the relatively small amount of the tax credit discourage you from taking advantage of this opportunity for greater awareness and excitement about your products. For once the IRS is your ally —make the most of it.