Hello Susan, can you help me prepare for when the Form 5695 is ready late January? I'm not 100% clear on carryforward options if I can't get the full credit in Year 1 (2023). First, I'll share below what I installed/spent in 2023. Then I will paste the copy from the IRS link you shared.
My primary home, I did the following:
1 exterior door: $500
4 skylights: Total price for all was $3900
2 heat pumps (minisplits) for home heat: Price after rebate was $6500
1 Electric Heat Pump Water heater: Price after rebates was $3500
Rooftop solar (electric) PV panels: $21,500
IRS INFO:
The maximum credit you can claim each year is:
- $1,200 for energy property costs and certain energy efficient home improvements, with limits on doors ($250 per door and $500 total), windows ($600) and home energy audits ($150)
- $2,000 per year for qualified heat pumps, biomass stoves or biomass boilers
The credit has no lifetime dollar limit. You can claim the maximum annual credit every year that you make eligible improvements until 2033.
The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years.
So my question is.....does the text "you can't apply any excess credit to future tax years" mean that I'm only able to claim $2000 total (lifetime) for the $10k I spent on the heat pumps and water heater, and $1200 total for the door and skylights? If so, what is the incentive to "go electric" quickly if it's better to do one small install per year for a better tax credit? Thank you in advance!
