Instructions For Form 5695 - Residential Energy Credits

2014

Department of the Treasury

Internal Revenue Service

Instructions for Form 5695

Residential Energy Credits

Section references are to the Internal Revenue Code unless

Association or cooperative costs. If you are a member of a

otherwise noted.

condominium management association for a condominium you

own or a tenant-stockholder in a cooperative housing

corporation, you are treated as having paid your proportionate

General Instructions

share of any costs of such association or corporation.

Future Developments

If you received a subsidy from a public utility for the

purchase or installation of an energy conservation

For the latest information about developments related to Form

product and that subsidy was not included in your gross

5695 and its instructions, such as legislation enacted after they

CAUTION

income, you must reduce your cost for the product by the

were published, go to

amount of that subsidy before you compute your credit. This rule

What's New

also applies if a third party (such as a contractor) receives the

subsidy on your behalf.

Separate instructions. Starting in 2014, the instructions for

Residential Energy Efficient Property

Form 5695 are separate from Form 5695.

Credit (Part I)

Nonbusiness energy property credit. The nonbusiness

energy property credit has been extended through December

If you made energy saving improvements to more than one

31, 2014.

home that you used as a residence during 2014, enter the total

Purpose of Form

of those costs on the applicable line(s) of one Form 5695. For

qualified fuel cell property, see

Lines 7a and

7b, later.

Use Form 5695 to figure and take your residential energy

credits. The residential energy credits are:

You may be able to take a credit of 30% of your costs of

The residential energy efficient property credit, and

qualified solar electric property, solar water heating property,

The nonbusiness energy property credit.

small wind energy property, geothermal heat pump property,

and fuel cell property. Include any labor costs properly allocable

Also use Form 5695 to take any residential energy efficient

to the onsite preparation, assembly, or original installation of the

property credit carryforward from 2013 or to carry the unused

residential energy efficient property and for piping or wiring to

portion of the credit to 2015.

interconnect such property to the home. The credit amount for

Who Can Take the Credits

costs paid for qualified fuel cell property is limited to $500 for

each one-half kilowatt of capacity of the property.

You may be able to take the credits if you made energy saving

Qualified solar electric property costs. Qualified solar

improvements to your home located in the United States in

electric property costs are costs for property that uses solar

2014.

energy to generate electricity for use in your home located in the

Home. A home is where you lived in 2014 and can include a

United States. No costs relating to a solar panel or other

house, houseboat, mobile home, cooperative apartment,

property installed as a roof (or portion thereof) will fail to qualify

condominium, and a manufactured home that conforms to

solely because the property constitutes a structural component

Federal Manufactured Home Construction and Safety

of the structure on which it is installed. The home does not have

Standards.

to be your main home.

You must reduce the basis of your home by the amount of

Qualified solar water heating property costs. Qualified solar

any credit allowed.

water heating property costs are costs for property to heat water

Main home. Your main home is generally the home where

for use in your home located in the United States if at least half

you live most of the time. A temporary absence due to special

of the energy used by the solar water heating property for such

circumstances, such as illness, education, business, military

purpose is derived from the sun. No costs relating to a solar

service, or vacation, will not change your main home.

panel or other property installed as a roof (or portion thereof) will

Costs. For purposes of both credits, costs are treated as being

fail to qualify solely because the property constitutes a structural

component of the structure on which it is installed. To qualify for

paid when the original installation of the item is completed, or, in

the credit, the property must be certified for performance by the

the case of costs connected with the reconstruction of your

nonprofit Solar Rating Certification Corporation or a comparable

home, when your original use of the reconstructed home begins.

entity endorsed by the government of the state in which the

For purposes of the residential energy efficient property credit

property is installed. The home does not have to be your main

only, costs connected with the construction of a home are

treated as being paid when your original use of the constructed

home.

home begins. If less than 80% of the use of an item is for

Qualified small wind energy property costs. Qualified small

nonbusiness purposes, only that portion of the costs that is

wind energy property costs are costs for property that uses a

allocable to the nonbusiness use can be used to determine

wind turbine to generate electricity for use in connection with

either credit.

your home located in the United States. The home does not

have to be your main home.

Only the residential energy efficient property credit (Part

I) is available for both existing homes and homes being

Qualified geothermal heat pump property costs. Qualified

constructed. The nonbusiness energy property credit

geothermal heat pump property costs are costs for qualified

CAUTION

(Part II) is only available for existing homes.

geothermal heat pump property installed on or in connection

Jan 08, 2015

Cat. No. 66412G

Instructions For Form 5695 - Residential Energy Credits - 2014

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