New Residential Energy Credit
This entry was posted on 12/14/2006 11:46 PM and is filed under uncategorized.
For 2006 and 2007 there is a new energy credit for homeowners. Beta versions of the new form 5695 to use for this are available today (
form 5695), but I haven't been able to find the instructions. I was asked what to do if you purchased some new windows in 2006, but install them in 2007? My guess is that you claim the credit when the new energy efficient windows are placed in service, in this case on your 2007 tax return. The soon to be available instructions will most likely clarify the situation.
Of note is the fact that the credit cannot reduce your taxes below zero. Accountants call this one a non-refundable credit. So if you have a small amount of taxable income, the credit may do you no good.
This credit is available for "existing" homes, and in my opinion, this rules out claiming the credit for costs associated with the construction of a new home.
"During 2006, individuals can make energy-conscious purchases that will provide tax benefits when filling out their tax returns next year. The credit will also be available for purchases in 2007. Manufacturers offering energy efficient items such as insulation or storm windows can assure their customers that their energy efficient items will qualify for the tax credit if certain energy efficiency requirements are met." - More for the
IRS
