Received Energy credit for windows in 2010 in the amount of $1500, does that cancel out receiving credit for buying a new Heating and Air Conditioning Unit in 2020?

[Cynthiad66]

You may be able to take these credits if you made energy saving improvements to your principal residence during the taxable year. In 2018, 2019 and 2020, the residential energy property credit is limited to an overall lifetime credit limit of $500 ($200 lifetime limit for windows)

You can claim a tax credit for 10% of the cost of qualified energy efficiency improvements and 100% of residential energy property costs. This credit is worth a maximum of $500 for all years combined, from 2006 to its expiration. Of that combined $500 limit, A maximum of $200 can be for windows.

[Opus 17]

You need to review your 2010 tax return.

There is a lifetime maximum credit of $500 for these types of energy efficient improvements. There are also sub-limits of $300 for an efficient air conditioner or heat pump, $150 for an efficient gas furnace, and $200 for efficient windows.  The credit is 10% of the cost of the property only (the windows or appliances) and does not include the cost of installation.

If you installed $1500 worth of windows, the most you could have claimed is $150 credit, if all that cost was the windows and not installation.  That means you have $350 left of your lifetime maximum.  Depending on the cost of your new system and whether it is a heat pump or a separate furnace and air conditioner, you might be eligible for up to $350 additional credit.

You must enter the cost of the appliances not including installation, and Turbotax will ask for the amount of previous credits you claimed.  If you don't have records and over-claim, the IRS will fix your return for you but it will delay payment of any refund.  You should always keep tax records relating to your home for as long as you own the home plus 6 years after you sell.

You could get a transcript of your 2010 tax return to make sure what you claimed, but that will take several weeks to arrive in the mail. 

[cindyfernando]

Thank you for your help.  In 2010 we installed $10,600 worth of windows. at the time $1500 was the energy credit, which was nice.    In 2020 we purchased Heating & Air conditioning unit at $9,440.  My question, is the $1500 my forever life time credit or are windows capped at $200 and $500 credit for Heating and Air conditioning leaving $300 credit for this year.  Or is that wishful thinking?  

[cindyfernando]

I did install a new heating and air conditioning unit in my primary residence in 2020 paid $9,440.  In 2010 we installed new window paid $10,600.  We received that year an energy credit of $1500 for purchasing windows.  Would I still be eligible for any credit, or does $1500 use up my life time credit of $500.  I saw something that windows were capped at $200 credit, which I didn't know if I subtract $200 capped limit from $500 limit and get $300 for this year.  When I enter information into turbo tax and put I got $1500 in 2010.  It say 0 for my credit if I did it correctly.  

[Opus 17]

I don’t know of any tax form that would have legally given you a $1500 credit in 2010 for windows. Can you tell me exactly which form shows the credit and which line on that form?  It may be there is a different credit that I am not remembering.

[cindyfernando]

Hi:  It was a special energy offer just in years 2009 and 2010 for windows up to $1500 credit on form 5695.  We got the full credit of $1500 on this form in 2010 for purchasing $10,600 on windows.

[Opus 17]

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@cindyfernando wrote:

Hi:  It was a special energy offer just in years 2009 and 2010 for windows up to $1500 credit on form 5695.  We got the full credit of $1500 on this form in 2010 for purchasing $10,600 on windows.

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Thanks, that was very helpful.  In looking at the actual law in question (26 U.S. Code § 25C - Nonbusiness energy property) I find that for 2009 and 2010, the maximum lifetime credit was $1500.  The limit dropped to $500 in 2011.  The current $500 limit is not a separate limit, so since you have already exceeded the $500 limit, you aren't eligible for any credits on your new heating system.

[cindyfernando]

Thank you for your help.