Energy Tax Credit

[GRM618]

I purchase a high energy efficient furnace and air conditioner for $7300 in 2020. When I put it in the energy deductions tax credit section it gave me a $0 credit. Is it because I'm on Social Security and don't pay taxes that it gave me a $0 credit or refund?

[xmasbaby0 · Accepted solution]

That's right.   If your only income was Social Security then you do not have a tax liability and have nothing against which to apply a tax credit.   Did you have any other income besides the SS?

[1cooldudeinAZ]

Hello.

I purchased 2 energy efficient (17 SEER) electric heat pumps in 2020.

My understanding is there is a $300 tax credit per heat pump.

TurboTax Home & Business has no input field for electric heat pumps.

It has input fields for solar, geothermal and fuel cells only.

As a result, it gives me $0 tax credit instead of expected $600.

Appreciate any thoughts on how to fix this.

[DoninGA]

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@1cooldudeinAZ wrote:

Hello.

I purchased 2 energy efficient (17 SEER) electric heat pumps in 2020.

My understanding is there is a $300 tax credit per heat pump.

TurboTax Home & Business has no input field for electric heat pumps.

It has input fields for solar, geothermal and fuel cells only.

As a result, it gives me $0 tax credit instead of expected $600.

Appreciate any thoughts on how to fix this.

---

IRS Form 5695 instructions page 2 - https://www.irs.gov/pub/irs-pdf/i5695.pdf

Nonbusiness Energy Property Credit
(Part II)
You may be able to take a credit equal to the sum of:
1. 10% of the amount paid or incurred for qualified energy efficiency improvements installed during 2020, and
2. Any residential energy property costs paid or incurred in 2020.
However, this credit is limited as follows.
• A total combined credit limit of $500 for all tax years after 2005.
• A combined credit limit of $200 for windows for all tax years after 2005.
• A credit limit for residential energy property costs for 2020 of $50 for any advanced main air circulating fan; $150 for any qualified natural gas, propane, or oil furnace or hot water boiler; and $300 for any item of  energy efficient building property.
If the total of any nonbusiness energy property credits you have taken in previous years (after 2005) is more
than $500, you generally can't take the credit in 2020.

You enter the amount for the heat pump on the screen Tell Us How Much You Paid for Energy-Saving Improvements in the box labeled Energy-Efficient Building Property

[PegK]

Looking at this chain I am hiring an accountant. I read that if you are unfortunate enough to be retired you don't get the credit? What you paid for the the HVAC or in my case the solar panels is what is reimbursed. I think something is wrong here.

[DoninGA]

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@PegK wrote:

Looking at this chain I am hiring an accountant. I read that if you are unfortunate enough to be retired you don't get the credit? What you paid for the the HVAC or in my case the solar panels is what is reimbursed. I think something is wrong here.

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Being retired or not has nothing to do with being able to receive the Home Energy tax credits.