Energy Tax Credits for Homeowners
Share This
Thanks to an extension by Congress, you may still be able to take energy credits if you make qualifying purchases for your home through 2016.
There are two types of energy credits for homeowners - the Residential Energy Efficient Property Credit and the Non-Business Energy Property Credit.
Residential Energy Efficient Property Credit
What is the credit?
You may qualify for this credit if you make energy-saving improvements to your home. It can be your existing home, or a home being constructed. This home does not need to be your main home (unless the credit is for fuel cells), but it does need to be located in the United States.
How much is the credit worth?
The Residential Energy Efficient Property Credit may be worth 30% of your cost of qualified property. You can include any labor costs for the onsite preparation, assembly, or original installation of the property.
What kind of property qualifies?
Alternative energy systems such as solar electric, solar hot water, fuel cell, small wind energy, and geothermal heat pump property, may qualify for the credit. For purposes of this credit, you can rely on the manufacturer's certification in writing that a product qualifies for the credit.
What if I don't owe enough tax this year to take the full credit?
If you cannot use all of the credit because of the tax liability limit, you can carry the excess credit to the following year.
Does taking the credit change my basis in my home?
You must reduce your basis in the home by the amount of any credit allowed.
Where can I find this credit on my tax return?
TaxAct reports your credit on Form 5695, Residential Energy Credits.
Non-Business Energy Property Credit
What is the credit?
The Non-Business Energy Property Credit pays you back for up to 10% of the amount paid or incurred for qualified energy efficiency improvements installed during the year, plus any residential energy property costs.
Your total credit cannot be more than the lifetime limit of $500 for all years after 2005. Of this credit, only $200 can be for windows, $50 for any advanced main air circulating fan, $150 for any qualified natural gas, propane, or oil furnace or hot water boiler, and $300 for any item of energy efficient building property.
If you have already taken at least $500 in nonbusiness energy property credits in previous years, you cannot take this credit in 2013.
What kind of property qualifies?
The following improvements may be used for the credit if they meet certain requirements for energy efficiency:
- Insulation material or system specifically and primarily designed to reduce heat loss or gain
- Exterior windows, including skylights
- Exterior doors
- Any metal or asphalt roof with pigmented coatings or cooling granules specifically and primarily designed to reduce heat gain of the home
The following residential energy properties also qualify:
- Certain electric heat pump water heaters; electric heat pumps; central air conditioners; natural gas, propane, or oil water heaters; and stoves that use biomass fuel
- Qualified natural gas, propane, or oil furnaces; and qualified natural gas, propane, or oil hot water boilers
- Certain advanced types of main air circulating fans used in natural gas, propane, or oil furnaces
What if I own a condo and the condominium association paid for the energy-saving improvements?
For purposes of these credits, if you are a member of a condominium management association for a condominium you own, or you are a tenant-stockholder in a cooperative housing corporation, you are treated as having paid your proportionate share of any costs of the association or corporation.
Does taking the credit change my basis in my home?
You must reduce the basis of your home by the amount of any credit allowed. Your basis is generally the amount you paid for your home, plus the cost of any improvements.
Where can I find energy credits on my tax return?
TaxAct reports your credit on Form 5695, Residential Energy Credits.
| January 2019 | ||||||
|---|---|---|---|---|---|---|
| S | M | T | W | T | F | S |
| 1 | 2 | 3 | 4 | 5 | ||
| 6 | 7 | 8 | 9 | 10 | 11 | 12 |
| 13 | 14 | 15 | 16 | 17 | 18 | 19 |
| 20 | 21 | 22 | 23 | 24 | 25 | 26 |
| 27 | 28 | 29 | 30 | 31 | ||
Upcoming Tax Dates
January 1 — Everyone
Federal Holiday (New Year's Day)
Details
January 10 — Employees who work for tips
If you received $20 or more in tips during December, report them to your employer
Details
January 15 — Individuals
Make a payment of your estimated tax for 2018 if you did not pay your income tax for the year through withholding (or did not pay in enough tax that way). Use Form 1040-ES
Details
January 15 — Social security, Medicare, and withheld income tax
If the monthly deposit rule applies, deposit the tax for payments in December 2018
January 15 — Farmers & fishermen
Pay your estimated tax for 2018 using Form 1040-ES
Details
January 21 — Everyone
Federal Holiday (Martin Luther King, Jr. Day)
Details
January 31 — All Employers
Give your employees their copies of Form W2 for 2018. If an employee agreed to receive Form W2 electronically, have it posted on a website and notify the employee of the posting.
January 31 — Individuals who must make estimated tax payments
If you did not pay your last installment of estimated tax by January 15, you may choose (but are not required) to file your income tax return (Form 1040) for 2017 by January 31. Filing your return and paying any tax due by January 31 prevents any penalty for late payment of the last installment. If you cannot file and pay your tax by January 31, file and pay your tax by April 15.
January 31 — Payers of gambling winnings
If you either paid reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of Form W2G.
January 31 — Social Security, Medicare, and withheld income tax
File Form 941 for the fourth quarter of 2018. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter timely, properly, and in full, you have until 02-10 to file the return.
January 31 — Certain small employers
File Form 944 to report social security and Medicare taxes and withheld income tax for 2018. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is $2,500 or more for 2018 but less than $2,500 for the fourth quarter, deposit any undeposited tax or pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.
January 31 — Farm employers
File Form 943 to report social security and Medicare taxes and withheld income tax for 2018. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.
January 31 — Federal unemployment tax
File Form 940 for 2018. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you deposited the tax for the year timely, properly, and in full, you have until February 10 to file the return.
January 31 — All businesses
Give annual information statements to recipients of certain payments you made during 2018
Details