IRS Form 5695 for 2009 $1,500 Tax Credit Replacement Windows

[Door&WindowPlus]

Here is a link to give your customers that need the IRS Tax Credit Form for their 2009 taxes. Some of my customers needed it and I just found it online.
This is not the draft version.

http://www.irs.gov/pub/irs-pdf/f5695.pdf

PDF form

[MACtheMacMan]

Unless I am just not getting it; these energy credits are BS. I've installed qualifying windows and doors and such other but it looks like I can only take the credit if I OWE TAXES !?!? So, if I am getting a refund I do not get any credit; not even on back taxes owed. It that is so, I need to stop paying my proper share of taxes (or just stop paying them). That would be totally unfair; my neighbor could earn the same amount, have the same things, spend the same amount and get the credit because he underestimated his taxes; so, in effect he gets more back!

I've been doing my won taxes with Turbo Tax for a lot of years now; maybe it's gotten too complicated. So, what's the deal; am I right or not? Thanks.

MAC

[TheWindowNerd]

Sounds like it is time to see a tax pro.

[shamu]

I have been expecting this, there are going to be more of this type of complaint as the filing deadline come closer. I'm sure there are alot of people that were expecting to get cash back regardless of wether they were due a refund or owed taxes. There was not a clear understanding that this credit was just an offset against taxes owed and not a "rebate."

[markf57]

Unless I am just not getting it; these energy credits are BS. I've installed qualifying windows and doors and such other but it looks like I can only take the credit if I OWE TAXES !?!? So, if I am getting a refund I do not get any credit; not even on back taxes owed. It that is so, I need to stop paying my proper share of taxes (or just stop paying them). That would be totally unfair; my neighbor could earn the same amount, have the same things, spend the same amount and get the credit because he underestimated his taxes; so, in effect he gets more back!

I've been doing my won taxes with Turbo Tax for a lot of years now; maybe it's gotten too complicated. So, what's the deal; am I right or not? Thanks.

MAC

You are confusing tax liability with taxes paid.

Just because you get a refund doesn't mean you didn't own any taxes. It just means that you paid too much and now you are getting it back. It is a refund of your overpayment.

For example, if you owe $10,000 and you paid in over the course of the year, $11,500, you get a refund of $1,500. So if you are eligible for a $1,500 tax credit, your refund check will be $3,000 ($1,500 overpayment + $1500 tax credit). Now if you have no tax liability, the tax credit will carry forward to next year and if you have a tax liability next year, you can take it then. I think you can roll it over up to 5 years.

Regardless, Turbo Tax will figure it all out.

[HomeSealed]

Unless I am just not getting it; these energy credits are BS. I've installed qualifying windows and doors and such other but it looks like I can only take the credit if I OWE TAXES !?!? So, if I am getting a refund I do not get any credit; not even on back taxes owed. It that is so, I need to stop paying my proper share of taxes (or just stop paying them). That would be totally unfair; my neighbor could earn the same amount, have the same things, spend the same amount and get the credit because he underestimated his taxes; so, in effect he gets more back!

I've been doing my won taxes with Turbo Tax for a lot of years now; maybe it's gotten too complicated. So, what's the deal; am I right or not? Thanks.

MAC

You are confusing tax liability with taxes paid.

Just because you get a refund doesn't mean you didn't own any taxes. It just means that you paid too much and now you are getting it back. It is a refund of your overpayment.

For example, if you owe $10,000 and you paid in over the course of the year, $11,500, you get a refund of $1,500. So if you are eligible for a $1,500 tax credit, your refund check will be $3,000 ($1,500 overpayment + $1500 tax credit). Now if you have no tax liability, the tax credit will carry forward to next year and if you have a tax liability next year, you can take it then. I think you can roll it over up to 5 years.

Regardless, Turbo Tax will figure it all out.

EXACTLY!

[fenestrationman]

This one of my postings a good while ago on another forum:

I am relatively new to this forum and was reading about your thoughts on the stimulus plan - specifically window and door costs vs tax credit. I began to get a little confused/concerned. I agree with Tru Blue on that the .30/.30 is not the best performance for all areas of the country, but unfortunately. it is what it is. Personally I would have been happy using Energy Star qualified products. The U & SHGC change with the various regions of the US and Canada. Also Energy Star is currently working on more stringent requirements due out in 2010 I believe.
Getting back to the subject. I spoke with a Bean Counter friend of mine and he enlightened me to what the credit is about. I asked him to give me examples and treat me like a little kid so that I would understand. What was explained is that I earn a wage, which, depending on how much I earn, Uncle Sam gets a percentage. Putting aside all the various deductions, lets assume my tax liability is $8,000.00. Lets now assume that I paid exactly $8,000.00 in taxes. I am not owed anything nor do I owe. Lets now assume that I bought $5,000.00 worth of windows and doors. I fill out the 2009 version of form 5695(in draft form as of today). My worksheet gives me 30% of the $5,000.00 which is $1,500.00. This is a deduction, which after I do the math, my tax liability is $6,500.00. My tax refund becomes $1,500.00.
The scenario where I would consider it a credit is, using the logic from above, my tax liability is only $600.00. If my tax work sheet calculates the same $1,500.00, I owe nothing, but would not get $700.00 on top of that. This is how it was explained to me.
I just want everyone to be on the same page. If anyone out there knows this not to be true, let us know. Would not want to be passing bad information.

[Skydawggy]

My position is and always has been that my windows meet the criteria for the tax credit. I am not an accountant and therefore am no more qualified to give tax advice than my accountant is qualified to make window recommendations. If you told people they would get a $1500 "rebate" then you may have misled them.

I am glad the tax credits are gone. We can now go back to recommending the best possible glass for each individual customer.