Form 5695 Residential Energy Credits

The IRS Form 5695 is to provide a tax credit to those who have made energy conscious, efficiency providing improvements to their home. This IRS credit has a lifetime limit of $500. Only $200 can be returned for windows. Also, only 10% of the eligible energy-saving improvements installed in your home during the tax year will qualify for any credits. But improvements are still subject to other stated maximums.

Residential Tax Credit Requirements

Each item must be installed in your primary home. A primary home is defined by the IRS as the home where you live most of the time, including a house, houseboat, mobile home, condominium, manufactured home, or cooperative apartment.

Any expenses must be incurred or paid in the current tax year;

• Windows and doors must meet Energy Star specs.
• Wood stoves must have a thermal efficiency of 75% or higher.
• Any natural gas, propane, oil furnaces or hot water boilers must have an annual fuel utilization efficiency of 95 or higher.

Any purchases made with subsidized energy financing will no longer qualify for the credit.

Qualifying Items

Some of the items that qualify are included but not limited to:

• Insulation material or any system that would reduce heat loss or gain.
• Exterior windows, skylights are included (this will be a $200 credit maximum).
• Exterior doors.
• Roofing that has been designed to reduce heat gain.
• Natural gas, oil furnaces or propane – (this would be a $150 credit maximum).
• Hot water boilers – (this would be a $150 credit maximum).
• Main air circulating fans used in propane, natural gas or oil furnaces – ($50 credit maximum).
• Electric heat pump water heaters. – ($300 credit maximum).
• Natural gas, oil or propane water heaters – ($300 cedit maximum).
• Electric heat pumps – ($300 credit maximum).
• Geothermal heat pumps – ($300 credit maximum).
• Central air conditioners – $300 credit maximum).

How to Fill Out

Step 1 – Download Form 5696

Step 2 – Gather Supporting Documents and Receipts – Once you’ve gathered your receipts you will be able to properly calculate your tax credit.

Step 3 – Complete Your Tax Credit Form – Follow the instructions, make your calculations, complete Form 5695. Attach to your return with required documents.