How to Claim Residential Energy Credits

If  you had qualified home energy improvements in 2016,  you may be able to claim residential energy credits.

Residential energy credits include two credits:

1. Residential energy efficient property credit.

2. Nonbusiness energy property credit.

In order to claim these credits, you need to figure out whether you had qualified home energy improvements and costs of the improvements, complete Form 5695 and file it with your federal income return Form 1040.

Here are the steps to claim residential energy credits.

Step 1: Figure out whether you made qualified home energy improvements.

Use the table below to figure out whether you made qualified home energy improvements.

Step 2: Collect receipts or documents for qualified home energy improvements you paid.

Collect following documents to figure out the qualified amount for credits and save them as your back-up in case of IRS audit:

1. Receipts or documents to support what you paid.

2. Manufacturer's certification of product qualifying for the credits. 

You vendor should be able to provide you the certification, or you can find information on the manufacturer's website or product's packaging.

Step 3: Figure out total costs qualified to claim the credits.

Depend on types of improvements, costs qualified for credits may  or may not include any installation cost. You can use the table above to determine whether you should include any installation cost to claim the credits.

Step 4: Claim residential energy credits on Form 5695.

Complete Form 5695, Residential Energy Credits and attach it to Form 1040 to claim the credits.

For more information, please see instruction for Form 5695, Residential Energy Credits.

Please share this post with your friends.