5695 Joint occupancy statement

[mk84]

My partner and I both own our house together but are not married and filing separately. I paid for a new air conditioner to be installed this year and it qualifies me for the energy credit. This is the third time its been rejected with this 5695 reject code and the dates have been pushed back again. I also get a similar failure code with the state return. What am I doing wrong and/or do we expect the IRS to actually fix this form before 4/15 deadline?

This return can not currently be processed for e-filing due to Joint Occupancy on Form 5695Reject Code 5695_Joint_Occupancy

Error code: 5695_Joint_Occupancy, details are not available

[AnnetteB6]

The IRS updated the system this week to start accepting e-filed tax returns with Form 5695 Joint Occupancy. However, a processing problem still exists. To ensure the accuracy of tax returns, TurboTax is working hard to eliminate the issue. The expected resolution date is April 4, 2025. On or after that date, please log back into your TurboTax account, fix any error messages and e-file your tax return. 

There is also an option to print and mail your return. If the special rule for joint occupants applies to you, please make sure that the box on line 32a of Form 5695 is checked. Then attach a statement to your printed return that explains how the special rule applies to your situation. 

This statement should include:

• The names and Social Security numbers of all joint occupants.
• A description of the property and the nature of the improvements made.
• An explanation of how the costs were shared among the joint occupants.

TurboTax does not automatically generate this statement, so you will need to create it yourself. Make sure to include this statement when you mail your tax return to the IRS. 

Here is a possible template that you can use:

Statement for Special Rule for Joint Occupants

Taxpayer Name: [Your Full Name]

Taxpayer Identification Number: [Your SSN or ITIN]

Tax Year: [Year]

Names and Social Security Numbers of Joint Occupants:

[Full Name of Joint Occupant 1], [SSN of Joint Occupant 1]

[Full Name of Joint Occupant 2], [SSN of Joint Occupant 2]

(Include additional names and SSNs if applicable.)

Description of Property and Improvements:

The property is located at [Property Address]. During the tax year, the following energy-efficient improvements were made to the property:

[Description of Improvement 1] (e.g., installation of solar panels, energy-efficient windows, etc.)

[Description of Improvement 2] (if applicable).

Explanation of Cost Sharing:

The total cost of the qualified energy-efficient improvements was $[Total Cost]. The costs were shared among the joint occupants as follows:

[Your Full Name]: $[Amount Paid by You]

[Joint Occupant 1's Full Name]: $[Amount Paid by Joint Occupant 1]

[Joint Occupant 2's Full Name]: $[Amount Paid by Joint Occupant 2]

Based on these contributions, I am claiming my allocable share of the energy-efficient home improvement credit. My share was calculated as follows:

Credit Allocable to Me = (Credit Limit for Property) × (Amount Paid by Me / Total Amount Paid by All Occupants)

[strongirler]

In the suggested:   Possible template that you can use: 

Statement for Special Rule for Joint Occupants

Could someone please explain to me how to determine this figure:

"Credit Allocable to Me = (Credit Limit for Property) × (Amount Paid by Me / Total Amount Paid by All Occupants)

How do I determine the Credit limit for Property?

Thank you.

[AnnetteB6]

You would need to know what the maximum allowed credit is for the type of improvement you made to the property.  For example, for an efficient central air conditioner, the maximum credit allowed is 30% of the cost up to $1200 maximum credit.  So, if the unit was $5000, then the maximum credit would be $1200 (since 30% of $5000 is $1500, but the maximum allowed is $1200).

You can find those details in the IRS Instructions for Form 5695, or TurboTax may give you that information as you go through the program.

@strongirler 

[strongirler]

Thank you!