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Category: Credits

What are the full qualifications for the Residential Energy Credit?

*The Nonbusiness Energy Property Credit has been extended through 2014 (Part II of Form 5695)*

You may be able to take this credit if you made qualified energy saving improvements to your home located in the United States in 2014. For credit purposes, costs are treated as being paid when the original installation of the item is completed, or in the case of costs connected with the construction or reconstruction of your home, when your original use of the constructed or reconstructed home begins. If less than 80% of the use of an item is for nonbusiness purposes, only that portion of the costs that are allocable to the nonbusiness use can be used to determine the credit.

Home: A home is where you lived in 2014 and may 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.

For information regarding what improvements and property qualify please click here.

Also, use Form 5695 to take any residential energy efficient property credit carryforward from 2013 to the unused portion of the credit to 2014.

For additional information, please refer to instructions for Form 5695 beginning on Page 3.