Did you make improvements to your home that will save energy? Or perhaps you’re building a new home and you paid for energy-saving structures or devices? Then you may be able to get a tax credit from Uncle Sam when you your federal income tax return this year. The so-called Residential Energy Credits are available through IRS Form 5695, if you qualify.
How to Qualify for Residential Energy Credits
Before you go ahead and fill out IRS Form 5695, make sure you, your home, and your energy-saving costs are going to qualify for the residential energy credit. First of all, you must have lived in your home most of the year. It must be your home, in other words.
Your home can be almost any type of structure, like a condo, a trailor, a pre-fab home, and even a houseboat, if that is where you lay your head each night to go to sleep.
The costs of installing or building energy-saving devices or structures must be actually paid, not owed. Keep you receipts and claim the energy tax credit during the same year you paid for the improvement.
What Kinds of Things Qualify for IRS Form 5695?
A good way to find out if a home improvement product qualifies on IRS Form 5695 is to look for the Energy Star logo on that product. For example, if you buy new doors for your house, and they boost the energy-savings by reducing transfer of heat through their glass, make sure that Energy Star logo is on the packaging.
Besides doors, all sorts of things qualify to be listed on IRS Form 5695. Everything from a new roof that reflects the sun’s rays to a new hot water heater that’s more efficient, can be claimed as part of the residential energy tax credit. Energy Star’s website has a complete detailed run-down of what counts and how much tax credit you can get for it.
Where are the IRS Form 5695 Instructions?
The IRS Form 5695 Instructions are pages 3-6 of the actual form. It’s all one PDF on the IRS website, located here if you want to take a look at the details.