If you have installed new energy efficient windows in your home in 2016, you may be eligible for the Residential Energy Tax Credit. If you are like myself and most Americans, you have more than likely procrastinated on completing your 2016 return. The good news is you can now use the information found in this article to learn how to claim your residential energy tax credit.
If you are the exception, rather than the rule and have already submitted your tax return, no worries, you can always submit an amended return to take full advantage of the tax credit. I better jump in now with a full disclaimer here; I am no tax expert, so run this by your tax attorney before you take my advice as the gospel.
Residential Energy Tax Credit Form 5695
To claim the residential energy tax credit on your 2016 return you will need to complete the IRS form 5695. You can find the tax form and instructions on how to complete the form here: IRS FORM 5695 & 5695 FORM INSTRUCTIONS. You can also use the form to carryforward a tax credit from 2015. If you are unable to utilize the entire credit amount for 2016 you may be able to carry the unused portion of your credit over to 2017. So, keep your tax records and a copy of the 5695 form and refer to it next year when you complete your 2017 return.
Eligibility Criteria: If you have made energy improvements to your home in 2016 and the home is located in the United States you may be eligible for the tax credit. The home must be the place where you lived in 2016 and may be a house, a houseboat, a mobile home, a condominium, or a cooperative apartment. Manufactured homes are also eligible for the tax credit providing they conform to the Federal Manufactured Home Construction and Safety Standards.
Qualifying Energy Improvements: To qualify for the tax credit, the energy improvements made to your home must have a life expectancy of a minimum of 5 years. The eligible products include: insulation materials designed to reduce heat loss or gain, exterior energy efficient windows & skylights, exterior energy efficient doors, and metal or asphalt roofing materials that are designed to reduce heat gain.
Maximum Credit: For the most part, the maximum amount you can claim for the residential energy credit is $500. One rare exception to this is if your spouse lived in separate homes, and your spouse also made energy improvements in 2016, and yet you file joint tax return.
For complete step-by-step directions, refer to the IRS Form 5695 Instructions.