Where is the entry for energy saving air conditioning/ heat pump?

[pjreads]

Energy savings lists do not seem to include all the items listed in the definition.
The definition includes electric heat pumps.
Does this mean energy efficient HVAC heat pumps?
If yes, then where should it be entered to get credit?

[DoninGA · Accepted solution]

Yes, the HVAC heat pump would qualify.

To enter Home Energy Credits -

• Click on Federal Taxes (Personal using Home and Business)
• Click on Deductions and Credit
• Click on I'll choose what I work on (if shown)
• Under Your Home
• On Home Energy Credits, click the start or update button

Or enter energy improvements in the Search box located in the upper right of the program screen. Click on Jump to energy improvements

On the screen Tell Us How Much You Paid for Energy-Saving Improvements -

Qualified energy property is any of the following.
• Certain electric heat pump water heaters; electric heat pumps; central air conditioners; and natural gas, propane, or oil water heaters.

Enter the cost in the box labeled Energy-Efficient Building Property.

[Compuski1]

When I entered the cost of the two heat pumps, turbo tax says the credit is only $300.  Is this correct?  I thought the credit was supposed to be 30% of the cost.

[JohnW152]

If it's an electric heat pump, it's only eligible for a maximum $300 credit.  See Line 22a in the Instructions for Form 5695 for more detail.

You're allowed to take a credit of 30% of costs of geothermal heat pump property.

@Compuski1 

[anton2g]

@JohnW152  I am seeing something different on this IRS Energy Efficient Home Improvement Credit FAQs Doc. It says "Heat pumps and biomass stoves and biomass boilers (30% of costs, including labor) satisfying the energy efficiency requirements in Q1 under the Energy Efficiency Requirements section: ... electric or natural gas heat pumps". Under the question "Is there a limit on the amount of the Energy Efficient Home Improvement Credit that I can claim? (added December 22, 2022)" it says "Yes. There is a $1,200 aggregate yearly tax credit maximum for all building envelope components, home energy audits, and energy property. Electric or natural gas heat pump water heaters, electric or natural gas heat pumps, and biomass stoves and biomass boilers have a separate aggregate yearly credit limit of $2,000. Thus, the maximum total yearly energy efficient home improvement credit amount may be up to $3,200. See Q1 under the Examples section, for a set of examples illustrating how these credit limits work."

[DoninGA]

@anton2g That is for tax years after 2022.

[GMoore2150]

I believe the 30% up to $2K is valid until in 2023.  My licensed installer told me the electric air heatpump tax credit valid in 2023 and beyond. 

The Amana website also shows the unit we purchased qualifies for up to $2K fed tax credit. 

Annual Limits on Energy Efficient Home Improvement Tax Credits

In addition to limits on the amount of credit you can claim for any particular equipment installation or home improvement, there are annual aggregate limits.  The overall total limit for an efficiency tax credit in one year is $3,200.  This breaks down to a total limit of $1,200 for any combination of home envelope improvements (windows/doors/skylights, insulation, electrical) plus furnaces, boilers and central air conditioners.  Any combination of heat pumps, heat pump water heaters and biomass stoves/boilers are subject to an annual total limit of $2,000. (Note: ENERGY STAR certified geothermal heat pumps are eligible for a separate tax credit and not counted against these limits.)

 I believe Turbo tax needs to be updated to reflect this.

[DoninGA]

@GMoore2150 IRS Form 5695 Residential Energy Credits for tax year 2023 has not been updated in the 2023 program.  The Form 5695 is scheduled to be updated on 01/10/2024 in TurboTax.

Go to this TurboTax website for forms availability - https://form-status.app.intuit.com/tax-forms-availability/formsavailability?albRedirect=true&product...

[drohiott]

Glad i finally found this string and thanks DoninGA for your update.  Was starting to get worried this wasn't going to be updated.  I will be looking for the stated update to release on 1/10/2024.  It currently only supported a $150 max credit for the one furnace i installed.  I am looking to receive the $600 max. based on what i paid.   Referencing the following TT and industry statement links below...

https://turbotax.intuit.com/tax-tips/home-ownership/energy-tax-credit-which-home-improvements-qualif...  

https://www.energystar.gov/about/federal_tax_credits/natural_gas_propane_oil_furnace

https://www.hvac.com/expert-advice/energy-tax-credits-2023-home-improvements/

Extract from TT follows...

Which home improvements qualify for the Energy Efficient Home Improvement Credit?

Beginning January 1, 2023, the credit becomes equal to the lesser of 30% of the sum of amounts paid for qualifying home improvements or the annual $1,200 credit limit. In addition the the aggregate $1,200 limit, annual dollar credit limits apply to specific items including:

• Home energy audits: $150
• Exterior doors: $250 per door (up to $500 per year)
• Exterior windows and skylights, central A/C units, electric panels and related equipment, natural gas, propane and oil water heaters, furnaces or hot water boilers: $600

[DoninGA]

@drohiott Forms availability is subject to change.

The Form 5695 is now scheduled for 01/17/2024.

Go to this TurboTax website for forms availability - https://form-status.app.intuit.com/tax-forms-availability/formsavailability?albRedirect=true&product...

[jperchik]

Every week, availability of Form 5695 gets pushed another 7 days into the future. Now says 1/24 on TurboTax website for forms availability - https://form-status.app.intuit.com/tax-forms-availability/formsavailability?albRedirect=true&product...

Form 5695 actually is visible in Forms Mode, but line 29a is not a writable field!

Why can't Turbotax tell us IN BIG RED LETTERS that the newest sections of Form 5695 (including line 29), as well as the step-by-step counterpart, is not yet available? That would avoid avoid all this confusion and give us the confidence that Turbotax is aware of the issue and is working on it.

[AmyC]

The developers work on forms throughout the year and use the drafts the IRS publishes throughout the year. Once a form is published as complete, then our software can be transformed into the final product. This is true for all forms and schedules in the software. There are thousands of forms still at work between the federal working their way down from most used to least used currently and plus all of the states. We are on it and don't want you to use software that isn't ready! Sometimes the forms will let you fill them in and then we stop you from filing, depending on the type of form and how it impacts other forms. It probably does seem like a crazy process that the federal and state governments are still working on forms to get them done for this filing season.  So here is the warning, many, many forms are just not done yet but we are working on it as soon as they are released.

@jperchik 

[GeoffH1]

Not updated yet...  now due 01-31

US

Form 5695

Residential Energy Credits

2024-01-31

2024-01-31

[GeoffH1]

I understand, but the early release of the software cost more at Costco then if I waited.  So it is somewhat deceptive to put a non working product out to your customers without any warning that the product is not functional yet.

[dbtttt]

I have the same questioin - Line 29a is for an electric heat pump with qualifying efficiency - this is a max $2,000 credit - not $300