Is the $500 tax credit for energy efficient upgrades per person, per home, or year?

[kendrahat]

My boyfriend and I both co-own a house (both our primary home). We are planning to upgrade our roof and insulation this year.  Possible more.  Is the $500 tax credit for energy efficient products per person or per home?  Could I pay for the roof and get the $500 credit for that this year, and have him pay for the insulation(and/or something else) and also get the $500 credit?

[DoninGA · Accepted solution]

Per taxpayer.

See this IRS website for more information - https://www.irs.gov/credits-deductions/individuals/nonbusiness-energy-property-credit

Nonbusiness Energy Property Credit (Section 25C) at a Glance

A credit of 10 percent of the cost of qualified energy-efficient improvements. Qualified improvements include adding insulation, energy-efficient exterior windows and doors, and certain roofs. The cost of installing these items is not included in the credit calculation. Additionally, a credit is available, including the costs of installation, for certain high-efficiency heating and air-conditioning systems, as well as high-efficiency water heaters and stoves that burn biomass fuel. There is a lifetime limitation of $500, of which only $200 may be used for windows. Qualifying improvements must have been placed in service in the taxpayer's principal residence located in the United States through Dec. 31, 2016.

See IRS Form 5695 Instructions - https://www.irs.gov/instructions/i5695/ch01.html#d0e153

Joint occupancy.    If you owned your home jointly with someone other than your spouse, each owner must complete his or her own Form 5695. To figure the credit, there are no maximum qualifying costs for insulation, exterior doors, and a metal or asphalt roof. Enter the amounts you paid for these items on the appropriate lines of Form 5695, Part II. For windows and residential energy property costs, the amount allocable to you is the smaller of:

1. The amount you paid, or

2. The maximum qualifying cost* of the property multiplied by a fraction. The numerator is the amount you paid and the denominator is the total amount paid by you and all other owners.

  *$2,000 for windows; $300 for energy-efficient building property; $150 for qualified natural gas, propane, or oil furnace or hot water boiler; or $50 for an advanced main air circulating fan.

[SweetieJean]

" *$2,000 for windows"  Should this be $200?

[DoninGA]

Good catch.....That sure looks like a typo in the instructions.  Should be $200 for windows.

[TaxGuyBill]

It is per "taxpayer" (person).

"The credit allowed under this section with respect to any taxpayer for any taxable year shall not exceed the excess (if any) of $500 over the aggregate credits allowed under this section with respect to such taxpayer for all prior taxable years ending after December 31, 2005."
<a rel="nofollow" target="_blank" href="https://www.law.cornell.edu/uscode/text/26/25C">https://www.law.cornell.edu/uscode/text/26/25C</a>

[DoninGA]

Does not that conflict with the IRS instructions for 5695?
"Residential energy property costs are costs of new qualified energy property that is installed on or in connection with your main home that you owned during 2015 located in the United States."
Main Home by definition - "Your main home is generally the home where you live most of the time."

[TaxGuyBill]

It still needs to installed in the "main home", rather than a secondary home, in order to qualify.  I don't see a conflict.

Although the Instructions aren't clear super clear to who/what the limit applies to, the Code says the limit is per taxpayer, not per "main home".

[DoninGA]

Okay....Thanks Bill.  I will stand corrected.