FS 2025-01: Q1. What type of residence is required for the credit? For example, is the credit available for a home rented by the
taxpayer or for a second home? (updated Jan. 17, 2025)
A1. A taxpayer claiming the credit for exterior windows or skylights, exterior doors, and insulation materials or systems
(including air sealing materials or systems) must have installed such property in a home located in the United States that is
owned and used by the taxpayer as the taxpayer’s principal residence. Due to the home ownership requirement, a taxpayer
who rents the home in which such property is installed would not be entitled to the credit. Due to the principal residence
requirement, a taxpayer who installs such property in the taxpayer’s second home would not be entitled to the credit.
A taxpayer claiming the credit for electric or natural gas heat pump water heaters; electric or natural gas heat pumps; central
air conditioners; natural gas, propane, or oil water heaters; natural gas, propane, or oil furnaces or hot water boilers; biomass
stoves or boilers; oil furnaces or hot water boilers; and improvements to, or replacements of, panelboards, sub-panelboards,
branch circuits, or feeders must have installed such property in a home located in the United States and used as a residence
by the taxpayer. In this case, the taxpayer may rent the home in which such property is installed, and such property may be
installed in the taxpayer’s second home.
