Heat Pump Credit

[snoblack]

I installed a new electric heat pump system ($9000) in 2022 and thought I claimed it on my 2022 tax return, but I don't see that amount shown anywhere on Form 5695 (2022).  All I see there is a $2000 amount ($300 credit) that I can't remember why it is there.  I may have misunderstood the instructions last year and thought that I could only enter $2000 of the cost when filling out my taxes.

Can I claim the cost incurred in 2022 on my 2023 tax return (or at least $7000 of it ($9000-$2000 shown in 2022))?

How can I fix this?

[AnnetteB6 · Accepted solution]

You cannot claim any portion of the costs that you incurred in 2022 on your 2023 tax return as an energy credit.  

For 2022, the energy credit for heat pumps was 30% of the cost, with a maximum credit of $2000.  If you want to correct this on your 2022 return, you will need to file an amended return in order to fix it.  

See the following TurboTax help article for more information about how to amend:

How do I amend my federal tax return for a prior year?
 

[snoblack]

Thank you for your answer, but now I'm even more confused.  I opened my 2022 tax return and clicked on the *I need to amend button* and got to the *deductions and credits section*.  Once there, I found the *Home Energy Credits* section and clicked on the *Update* button.  After answering all the lead-in questions, I got to the Energy-Efficient Building Property section and saw that the cost that I had originally entered there was $8700. (Which was the correct cost.  I misspoke (from an aging memory) when I said it was $9000 in my original question.)

I don't understand why I only received a $300 credit for this and not $2000 (the lesser of (30% * $8700 😃 #2610 or $2000).  (When I experimentally entered the cost in my 2023 return as I was filling it out because I did not remember entering it in my 2022 return, TT said I would get a $2000 credit - which is what prompted me to go back and see what I entered in my 2022 return.  (Yes, I've removed it from my 2023 return since I posted the original question.))

Am I doing something incorrectly or making incorrect assumptions?

[snoblack]

Sorry, the smiley face was the result of entering an equals sign followed immediately by a closed parenthesis.  I probably should have separated them like this: = ), but I didn't think that they would turn into an emoji.  

[DMarkM1]

The Energy Efficient Home Improvement Credit available for a qualifying heat pump installation in 2022 was $300.  Here is a government reference.  

Also below are the instructions for line 22a on form 5695 for tax year 2022.

"Line 22a. Enter the amounts you paid for energy-efficient building property. Energy-efficient building property is any of the following. 

• An electric heat pump water heater that yields a Uniform Energy Factor of at least 2.2 in the standard Department of Energy test procedure. 

• An electric heat pump that achieves the highest efficiency tier established by the Consortium for Energy Efficiency (CEE) as in effect on January 1, 2009. 

• A central air conditioner that achieves the highest efficiency tier that has been established by the CEE as in effect on January 1, 2009. 

• A natural gas, propane, or oil water heater that has a Uniform Energy Factor of at least 0.82 or a thermal efficiency of at least 90%. 

Don't enter more than $300 on line 22a."