What are residential energy credits?

Individuals who purchase qualified energy efficient improvements for their main home may be allowed nonrefundable tax credits. There are two types of residential energy credits:

• Residential clean energy credit (previously named the residential energy efficient property credit) (Form 5695, Residential Energy Credits, Part I, which is out of scope for the VITA/TCE programs)
• Energy efficient home improvement credit (previously named the nonbusiness energy property credit) (Form 5695, Part II)

What is the energy efficient home improvement credit?

This non-refundable credit has no lifetime limit. The maximum total yearly credit of $3,200 is comprised of separate $1,200 and $2,000 limits. The following are eligible:

A $1,200 aggregate yearly credit limit applies across any combination of building envelope components, home energy audits, and residential energy property. For details on qualified expenditures, review the Form 5695 Instructions or the FAQs on IRS.gov for more information.