Home Energy Credits on Existing Homes Only!
We had a reader ask the following question:
“My wife and I built a new home in 2010. We moved in on June 24,2010. Can we take the residential energy credit for insulation, windows, & doors on form 5695 for this house on our 2010 tax return? Thanks, Dave”
I am afraid that we do not have good news for Dave. The nonbusiness energy credit that he is asking about is normally claimed on form 5695 as he states, however, the type of costs that Dave is describing are restricted to existing homes. The credit is designed to help offset the cost of retrofitting an existing home with energy saving devices.
However, if Dave and his wife had put in any of the following devices:
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Qualified solar electric
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Qualified solar water heating
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Qualified small wind power
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Qualified geothermal heat pump
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Qualified fuel cells
Then Dave would claim those credits on form 5695, but it does not appear that these costs were incurred in their new house. These type of costs are allowed as a credit on both new homes and existing homes.
So, the bottom line is that the credits for the typical insulation, windows, doors, etc. must be on an existing home, not on a new home.
Paul Neiffer is a certified public accountant and business advisor specializing in income taxation, accounting services, and succession planning for farmers and agribusiness processors. Paul is a principal with CliftonLarsonAllen in Walla Walla, Washington, as well as a regular speaker at national conferences and contributor at agweb.com. Raised on a farm in central Washington, he has been immersed in the ag industry his entire life, including the last 30 years professionally. Paul and his wife purchase an 180 acre ranch in 2016 and enjoy keeping it full of animals.
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