Non-business Energy Property Credit  (Form 5695 Part I)

posted Jan 15, 2011, 8:08 PM by Wayne Culp   [ updated Nov 23, 2011, 11:03 AM by Wayne Culp ]

From: Volunteer Tax Alert (VTA) – 2010-05    February 1, 2010, Documentation Required to Determine Eligibility for Certain Tax Benefits


There are two kinds of property for this credit. Here are some key points to consider:

§         Qualified energy efficiency improvements include insulation, exterior windows, exterior doors, and metal roofing. Products must meet certain requirements. Does not include installation costs.

§         Qualified residential energy property includes certain water heaters, heat pumps, air conditioners and other items specified in the instructions to Form 5695. Products must meet certain requirements. Installation costs are includable.-(This is out of scope for AARP Tax-Aide)

For property purchased before June 1, 2009, return preparers can rely solely on the manufacturers’ certifications and Energy Star labels provided by the taxpayer to determine that the purchase qualifies.

o       Manufacturers have been advised that they should not continue to provide certifications for property that fails to meet the new standards. The IRS has issued Notice 2009-53 that will allow manufacturers to certify that their products meet the new standards. Please note, not all ENERGY STAR qualified products qualify for a tax credit. For detailed information about qualifying improvements, visit the U.S. Department of Energy’s Energy’s EnergyStar Web site and the EnergyStar Frequently Asked Questions site.

.Volunteer return preparers may not accept the taxpayer’s oral or written statement regarding the eligibility and amount of their purchase. The taxpayer must provide documentation including manufacturers’ certifications, Energy Star labels, and receipts. The preparer should use these documents in conjunction with the resources listed above to determine eligibility.

Note: Residential Energy Efficient Property Credit (Form 5695 Part II) is complex and therefore out of scope for the VITA/TCE program.

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