Q: Regarding the tax credit for home replacement windows in 2009 and 2010 that meet certain energy performance criteria: I have the documentation but how do I claim this credit? Is there a separate IRS form or, if not, a 1040 line for it?
A: Because there is so much emphasis on the energy tax credits, I thought we’d start with a review of what’s available.
According to the IRS, taxpayers may claim a tax credit of up to 30 percent of the cost of certain energy-efficient property or improvements for 2009 but the tax credit is limited to $1,500.
Some of the items listed as permitted for the tax credit include high-efficiency heat pumps, air conditioners and water heaters; as well as energy-efficient windows, doors, insulation materials and certain roofs. And, if you plan to install solar energy panels, wind energy projects and some geothermal heat pumps, you may qualify for the credit without a dollar limitation.
In each instance, you must make sure that the work you are doing to the home would qualify for the tax credit. Don’t forget to keep all of your paperwork as evidence that you purchased the items and that you made these improvements to your home. You’ll need that when it comes time to claim your tax credit.
I asked Bill Nemeth, an enrolled agent based in Atlanta, how the credit can be claimed, since the final form has not yet been issued by the IRS.
“The 2009 residential energy credits are claimed by filling out form 5695 and carrying the calculated credit over to the second page of the 1040, line 52,” Nemeth wrote in an email.
The IRS’s Form 5695 has not yet been made final, but you can download it for free from the IRS.gov website once it is finalized. Simply go to the IRS.gov website and type the form number into the search engine. The link to the 2009 version of 5695 should pop up.
Find out more about the residential energy tax credits at this IRS.gov page: http://www.irs.gov/newsroom/article/0,,id=154657,00.html
Read more at ThinkGlink.com about the energy tax credits.