PriorTax | Nonbusiness Energy Property Credit - Form 5695

Nonbusiness Energy Property Credit - Form 5695

The Nonbusiness Energy Property Credit offers a tax credit for making energy efficient improvements to your principal home.

Qualifying improvements include adding insulation, energy-efficient exterior windows and skylights, energy-efficient doors, energy-efficient heating and air conditioning systems, water heaters and stoves that burn biomass, etc. In certain cases the cost of installation may even qualify.

The credit was expanded in 2009 as part of the 2009 American Recovery and Reinvestment Act. The changes to the law increased the credit to 30% of the cost of qualifying improvements. The maximum credit is $1,500 for the combined 2009 and 2010 tax years.

The improvements must have been made between December 31, 2008 and January 1, 2011 in order to qualify for the expanded 2009 credit.

Before the 2009 changes, the credit was available in 2006 and 2007, but not 2008. For those years, you can only receive a credit of up to $500.

For 2011 the credit only amounts to 10% of the cost of of improvements and is capped by a $500 lifetime limit.