Use Form 5695 to figure and take your residential energy credits. The residential energy credits are:
- The nonbusiness energy property credit (expired Dec 31, 2017) (Part II reserved), and
- The residential energy efficient property credit.
- Also use Form 5695 to take any residential energy efficient
property credit carryforward from 2017 or to carry the unused
portion of the credit to 2019.
Only the residential energy efficient property credit is available for both existing homes and homes being constructed.
You may be able to take the credits if you made energy saving improvements to your home located in the United States in 2018.
Home. A home is where you lived and can include a house, houseboat, mobile home, cooperative apartment, condominium, and a manufactured home that conforms to Federal Manufactured Home Construction and Safety Standards.
You must reduce the basis of your home by the amount of any credits allowed.
Main home. Your main home is generally the home where you live most of the time. A temporary absence due to special circumstances, such as illness, education, business, military service, or vacation, will not change your main home.
Costs. For purposes of both credits, costs are treated as being paid when the original installation of the item is completed, or in the case of costs connected with the reconstruction of your home, when your original use of the reconstructed home begins. For purposes of the residential energy efficient property credit only, costs connected with the construction of a home are treated as being paid when your original use of the constructed home begins. If less than 80% of the use of an item is for nonbusiness purposes, only that portion of the costs that is allocable to the nonbusiness use can be used to determine either credit.
Qualified energy efficiency improvements. Qualified energy efficiency improvements are the following building envelope components installed on or in your main home that you owned during 2017 located in the United States if the original use of the component begins with you, the component can be expected to remain in use at least 5 years, and the component meets certain energy standards.
Any insulation material
- Any insulation material or system that is specifically and primarily designed to reduce heat loss or gain of a home when installed in or on such a home.
- Exterior windows (including certain storm windows) and skylights.
- Exterior doors (including certain storm doors).
- Any metal roof with appropriate pigmented coatings or asphalt roof with appropriate cooling granules that are specifically and primarily designed to reduce the heat gain of your home, and the roof meets or exceeds the Energy Star program requirements in effect at the time of purchase or installation.
For purposes of figuring the credit, do not include amounts paid for the onsite preparation, assembly, or original installation of the building envelope component.
Residential Energy Efficient Property Credit
You may be able to take a credit of 30% of your costs of qualified solar electric property, solar water heating property, small wind energy property, geothermal heat pump property, and fuel cell property. Include any labor costs properly allocable to the onsite preparation, assembly, or original installation of the residential energy efficient property and for piping or wiring to interconnect such property to the home. The credit amoun