topic Residential Energy Credit Hot Water Heater in Deductions & credits

Residential Energy Credit Hot Water Heater

emetzger — Wed, 11 Feb 2026 04:03:58 GMT

I just entered the information for our new energy efficient hot water heater installed in 2023 which on IRS Form 5695 is Part II of Energy Credits, Residential Property. Turbo tax is granting me the full 30% credit of the total cost, but according to Form 5695 Section B Line 23b, the credit shall not exceed $600. My cost is $4,632 and Turbo Tax states my credit is $1,390. Am I correct that this is not calculating correctly, or am I

missing something?

Re: Residential Energy Credit Hot Water Heater

AmyC — Fri, 09 Feb 2024 00:21:23 GMT

I would like to take a deeper look at this. However, I need a diagnostic file which is a copy of your tax return that has all of your personal information removed. You can send one to me by following the directions below:

TurboTax Online:

Sign into your online account.

Locate the Tax Tools on the left-hand side of the screen.

A drop-down will appear. Select Tools

On the pop-up screen, click on “Share my file with agent.”

This will generate a message that a diagnostic file gets sanitized and transmitted to us.

TurboTax Desktop/Download Versions:

Open your return.

Click the Online tab in the black bar across the top of TurboTax and select “Send Tax File to Agent”

This will generate a message that a diagnostic copy will be created. Click on OK and the tax file will

Please provide the Token Number that was generated in the response and @AmyC to notify me.

Re: Residential Energy Credit Hot Water Heater

emetzger — Fri, 09 Feb 2024 18:21:30 GMT

Thank you for the reply. This was my mistake. I had entered the cost for the water heater in the "heat pump" water heater section by mistake. When moving the cost to the "water heater" option, the credit calculated properly at the $600 limit.