Understanding Form 5695: Residential Energy Credits
IRS Form 5695 is the paperwork clients can file with their income taxes to take advantage of financial incentives to go green. The Form 5695 worksheet is for calculating and claiming non-business energy property credits or residential energy-efficient property credits.
This form isn’t limited to the solar tax credit: It also applies to other renewable energy upgrades such as geothermal heat pumps, wind turbines, fuel cells, solar water heating systems, biomass and many other alternative energy devices.
IRS Form 5695 is the paperwork clients can file with their income taxes to take advantage of financial incentives to go green. The Form 5695 worksheet is for calculating and claiming non-business energy property credits or residential energy-efficient property credits.
This form isn’t limited to the solar tax credit: It also applies to other renewable energy upgrades such as geothermal heat pumps, wind turbines, fuel cells, solar water heating systems, biomass and many other alternative energy devices.
Residential Energy Efficient Property Credit
This credit is aimed at encouraging the use of renewable energy sources in residential properties. The following installations are eligible for the Residential Energy Efficient Property Credit:
Costs for fuel cells with a minimum capacity of 0.5 kilowatts and an efficiency of at least 30%. For most of these installations, the credit is equal to 30% of the costs, including labor, from 2022 through 2032.
Filling out Form 5695 involves several steps:
1.Part I: Residential Energy Efficient Property Credit
2.Part II: Nonbusiness Energy Property Credit
3.Total Credit
