Energy Saving Improvements - Central AC units - Form 5695

[Sausalito789]

We replaced both central AC units in 2022. Both meet the minimum SEER rating and appear on the Lennox company statement.

My question.....Can we claim a credit for both or just one? If both....do we submit two 5695 forms or does the 5695 form cater for situations where the homeowner has replaced more than one unit?

Thanks

[JohnW152]

You can claim both, if they qualify, and you would file only one Form 5695. 

Please see the Instructions for Form 5695 (2022) and the TurboTax blog Energy Tax Credit: Which Home Improvements Qualify? to verify that your installation qualifies for the credit.

[Sausalito789]

Thanks. Could you give me step by step in Turbo Tax on where I enter the quantity of units installed? We replaced 2 x AC units for a cost of approx $12K.

I can see on Form 5695 where I enter the amount spent. I cannot see where I enter the qty 2 systems. The result is a credit of 300 USD. If I enter the cost of one unit, app. $6K then the credit is...300 USD.

My gut tells me that $300 is what I will get back regardless of how many AC units I installed. I could install 50 new units in my home in 2022 and the credit would be...$300.

Can you help point me where I enter the fact I installed 2 AC units both of which qualify for a rebate.

Thanks

[PattiF · Accepted solution]

Yes, you are correct that you will only receive $300 for installing two energy-efficient AC units. There is no place to enter the quantity of AC units installed. Only the total amount that was paid can be entered into the form.

Please see this TurboTax article about Energy Tax Credits. The maximum credit for any other single residential energy property cost is $300.

[Sausalito789]

OK thanks. That's what I figured would be the case. What I will do then is just enter the cost of one of the AC units and see if it is possible to carry over the remaining one onto my 2023 Tax Return.

Thanks

[JohnW152]

There is no carryover of unused credit for residential energy property costs, which is how the purchase of your central air conditioners would be categorized. 

Your expense would be entered in the Energy Efficient Home Improvement Credit (Part II) portion of Form 5695, which does not permit carryover.

Please see the IRS' Instructions for Form 5695 for more information.