I have a new air source heat pump that was installed in 2022. i don't see where i can get a tax savings from it. it only say geo-thermal heat pumps. where do i go?

[TGold2]

i googled air source heat pumps and it appears there is a tax savings in 2022 for this but don't see it on the form.

[SteamTrain]

@TGold2 

When you go thru the home energy credits section...The air-source heat pump is entered on one of the pages before you get to the geothermal one.

On a line labelled "Energy-Efficient Building Property"

[DanaB27]

Please follow these steps to enter the air source heat pump cost:

1. Log into TurboTax
2. Search for "energy improvements"
3. Click on “Jump to energy improvements"
4. Continue until you get to the "Tell Us How Much You Paid for Energy-Saving Improvements" screen and enter the cost under "Energy-Efficient Building Property"

It will be entered on line 22 of Form 5695. Please see IRS Residential energy property costs for additional information.

[SatNam108]

There is a cap for energy efficiency improvements. However, per the IRS guidelines, air source heat pumps are excluded. You can get a credit of 30% of the cost to install up to $2,000. 

If I add the cost to install the air source heat pumps on the line that is suggested (Energy Efficiency Building Property) I don't get any tax credit since my other energy efficiency improvements have already reached the lifetime cap. 

Where should the cost of installing the air source heat pumps be added to avoid the life time energy efficiency tax credit cap? 

[DoninGA]

@SatNam108 You are referring to the credit and cap that is effective beginning in tax year 2023.  

[PatriciaV]

For tax year 2022, the energy efficient home improvement credit is a $500 lifetime credit. This credit is increased for years AFTER 2022.

Per the IRS FAQ on Clean Energy Property Credits:

"Beginning January 1, 2023, the amount of the credit is equal to 30% of the sum of amounts paid by the taxpayer for certain qualified expenditures <snip> The credit is allowed for qualifying property placed in service on or after January 1, 2023, and before January 1, 2033."