You're correct. According to the Instructions for Form 5695 (2023):
For the energy efficient home improvement credit, the lifetime limitation has been replaced by an annual credit limit. A 30% credit, up to a maximum of $1,200, may be allowed for:
• Insulation material or air sealing material or systems,
• Exterior doors,
• Windows and skylights,
• Central air conditioners,
• Natural gas, propane or oil water heaters,
• Natural gas, propane or oil furnaces or hot water boilers,
• Improvements or replacement of panelboards, subpanelboards,
branch circuits or feeders, and
• Home energy audits
To enter home energy credit information in TurboTax Online:
- Open TurboTax Online
- Select Tax Home in the left pane
- On the Hi, let's keep working on your taxes! screen, select the dropdown on the right side of the Deductions & Credits box, then select Start, Continue, or Pick up where you left off
- On the Your tax breaks page, scroll down and select the dropdown to the right of Your Home
- Select Start or Revisit to the right of Home Energy Credits
- On the Energy-Saving Home Improvements page, select Yes in answer to the question, Did you make energy-saving improvements in 2023 or have a carryforward from 2022?
- Enter all relevant information on the ensuing pages
Note that Form 5695, Residential Energy Credits, the form on which such expenses would be claimed for tax year 2023, hasn't yet been finalized in TurboTax. Once this is done, you’ll be able to complete the form using the updated computations.
The form is tentatively scheduled for use on February 7th, 2024. You can check for any updates in TurboTax's Tax form availability app.
