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wdslvr1
New Member

My return is ready for filing, however Form 5695 home energy tax credits hasn't been approved by the IRS yet. Should I go ahead and file now or wait for this form?

We qualify for this credit in 2019 for a metal roof installation.
4 Replies
TomK100
Expert Alumni

My return is ready for filing, however Form 5695 home energy tax credits hasn't been approved by the IRS yet. Should I go ahead and file now or wait for this form?

If you can wait, that may be a better option then filing an amended tax return (1040-X).  The tentative date for Form 5695 (Residential Energy Credits) is 1/29/2020.  

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wdslvr1
New Member

My return is ready for filing, however Form 5695 home energy tax credits hasn't been approved by the IRS yet. Should I go ahead and file now or wait for this form?

Now that I read the tax credit further, it states 30% of the cost as a credit toward your return IF you owe taxes.  The way I understand it,  is that if you are already receiving a refund, it doesn't apply?

BillM223
Expert Alumni

My return is ready for filing, however Form 5695 home energy tax credits hasn't been approved by the IRS yet. Should I go ahead and file now or wait for this form?

To address your last question, this means that the credit generated by your expense will be applied only to taxes you were assessed, not what your refund is.

 

If you have a refund because of your withholding, then the credit is applied to the tax before the withholding. This may have the effect of increasing your refund.

 

But if the credit exceeds the taxes that were assessed (before withholding and estimated taxes), then the credit will be limited to the amount of taxes you were assessed.

 

For example, you were assessed $3,000 in taxes, and your withholding is $4,500. If you credit is $1,500, then the $1,500 will be applied to your assessed tax, and the amount of your withholding will increase your refund by the $1,500.

 

If you were assessed $3,000 in taxes, and your withholding is $4,500. If you credit is $4,500, then only $3,000 of the credit will be applied to your assessed tax, and the amount of your withholding will increase your refund by only the $3,000.

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TomK100
Expert Alumni

My return is ready for filing, however Form 5695 home energy tax credits hasn't been approved by the IRS yet. Should I go ahead and file now or wait for this form?

A tax credit is a dollar-for-dollar reduction of the income tax you owe. For example, if you owe $1,000 in federal taxes but are eligible for a $1,000 tax credit, your net liability drops to zero. 

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