Energy Efficient Window Credit

[johkar1]

We installed energy efficient windows in part of our home in 2019 and then some more in 2021.  So none installed in 2020.  We were unaware I guess and didn't make any energy credit claim on our 2019 taxes for the windows.  In filling out the energy credit screens in TurboTax for 2020 it asks what we spent in prior years on windows so we entered the window expense in the 2019 box.  We didn't see any impact in 2020 taxes of course because this was a 2019 expense.  I'm assuming this is a one-time credit so do we delete out the amount we entered in our 2020 taxes since we didn't  take a credit in 2019?  Will entering the 2019 amount make the government think we already claimed our credit?  I want to take the one-time credit but don't want to screw things up for when we file our 2021 taxes and try to claim the energy credit for the 2nd batch of windows we replaced.

[JohnW152 · Accepted solution]

Yes, go ahead and delete the 2019 amount from your 2020 return, since you never claimed a credit for the windows.  Leaving it won’t necessarily make the government think you received the credit, but it will make TurboTax think you did, and might import that information into next year’s return.

You might also consider amending your 2019 return to claim the credit for that tax year.  Please see the 2019 Instructions for Form 5695 and the TurboTax Help article How to amend (change or correct) a return you already filed for more information.

[LEX10]

In 2019 I took an energy credit for a hot water heater.  It was in the amount of $489.00.  This year's return I replaced all the house windows and the roof, but why am I only entitled to $11.00 deduction on my return and not the $500.00 maximum?  Can't I carryover the difference next year and get another $500.00?  (That is what I understood from your help pop-up box.)  Because when I finish my 2020 federal taxes, Form 5695 - Line 16 is blank?

Is the $500.00 energy credit per year or per lifetime then?

[AnnetteB6]

The $500 Nonbusiness Energy Property Credit has a lifetime cap.  Once the $500 has been reached, the credit can no longer be claimed.

See the following TurboTax article for more information:  Can I claim energy-efficient appliances or energy-saving home improvements?

[toleds91]

We never submitted for any energy effiecient credits though we've had multiple windows replaced since we purchased our home in 2004 until last replacement in 2019.  I have all my receipts.  I have input all the $ values but still end up with $0 credit.  Is this correct and if so, why did turbotax have me enter these historical values?

[BillM223]

@toleds91

You say that you did not claim any credits for these windows in prior years. The screen headed "Did you make any improvements to your Windows in prior years?" really wants to know if you took any credit in prior years. 

Yes, you enter the expenses, but TurboTax is calculating the amount of credit for each year, and once you have hit the cumulative limit, that's it.

If you did not take the credit in any previous year, then don't enter any expenses for previous years. Just enter the current year expense and you should get a credit of some sort.