Form 5695 Residental Energy Credits

Form

5695

Department of the Treasury
Internal Revenue Service

Residential Energy Efficient Property Credit

OMB No. 1545-0074

2008

©

See instructions.

©

Attach to Form 1040 or Form 1040NR.

Name(s) shown on return

Attachment
Sequence No. 158
Your social security number

Before you begin: Figure the amount of any District of Columbia first-time homebuyer credit you are claiming.
Note. Skip lines 1 through 21 if you only have a credit carryforward from 2007.
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2
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5
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1
Qualified solar electric property costs
2
Multiply line 1 by 30% (.30)
$2,000
3
Maximum credit amount
Enter the smaller of line 2 or line 3
5
Qualified solar water heating property costs
6
Multiply line 5 by 30% (.30)
$2,000
7
Maximum credit amount
Enter the smaller of line 6 or line 7
9
Qualified fuel cell property costs
10
Multiply line 9 by 30% (.30)
Kilowatt capacity of property on line 9 above © .
X $1,000 11
Enter the smaller of line 10 or line 11
13
Qualified small wind energy property costs
14
Multiply line 13 by 30% (.30)
Kilowatt capacity of property on line 13 above © .
X $1,000 15
$4,000
16
Maximum credit amount
Enter the smallest of lines 14, 15, or 16
18
Qualified geothermal heat pump property costs
19
Multiply line 18 by 30% (.30)
$2,000
20
Maximum credit amount
Enter the smaller of line 19 or line 20
Credit carryforward from 2007. Enter the amount, if any, from your 2007 Form 5695, line 34
Add lines 4, 8, 12, 17, 21, and 22
24
Enter the amount from Form 1040, line 46, or Form 1040NR, line 43

25

1040 filers: Enter the total, if any, of your credits from Form
1040, lines 47 through 51; line 12 of the Line 11 worksheet in
Pub. 972 (see instructions); Form 8396, line 11; Form 8839, line
25
18; and Form 8859, line 11.
1040NR filers: Enter the amount, if any, from Form 1040NR,
lines 44 through 46; line 12 of the Line 11 worksheet in Pub. 972
(see instructions); Form 8396, line 11; Form 8839, line 18; and
Form 8859, line 11.
Subtract line 25 from line 24. If zero or less, enter -0- here and on line 27
Residential energy efficient property credit. Enter the smaller of line 23 or line 26 here and on
Form 1040, line 53, or Form 1040NR, line 48, and check box c on that line

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%

Credit carryforward to 2009. If line 27 is less than line 23, subtract line
27 from line 23

For Paperwork Reduction Act Notice, see instructions.

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Cat. No. 13540P

Form

5695

(2008)

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Form 5695 (2008)

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Section references are to the Internal Revenue Code.

federal, state, or local program, the principal purpose
of which is to provide subsidized financing for projects
designed to conserve or produce energy.

What’s New for 2008

Residential Energy Efficient Property Credit

General Instructions
Nonbusiness energy property credit expired. You
cannot take the nonbusiness energy property credit for
property placed in service in 2008.
Credit expanded. You can now include costs for
qualified small wind energy property and qualified
geothermal heat pump property in figuring the
residential energy efficient property credit.

What’s New for 2009
Nonbusiness energy property credit available. The
nonbusiness energy property credit will be available for
property placed in service in 2009. The credit is
available for items such as high-efficiency heating and
cooling systems, water heaters, windows, doors, and
insulation. The amount of the credit will be limited by
the amount of any nonbusiness energy property credit
you took in 2006 or 2007.
Qualified solar electric property. There is no limit on
the amount of qualified solar electric property costs
when figuring the residential energy efficient property
credit.

Purpose of Form
Use Form 5695 to figure and take your residential
energy efficient property credit, including any credit
carryforward from 2007.

Who Can Take the Credit
You may be able to take the credit if you made energy
saving improvements to your home located in the
United States in 2008. For credit purposes, costs are
treated as being paid when the original installation of
the item is completed, or in the case of costs
connected with the construction or reconstruction of
your home, when your original use of the constructed
or reconstructed home begins. If less than 80% of the
use of an item is for nonbusiness purposes, only that
portion of the costs that are allocable to the
nonbusiness use can be used to determine the credit.
Home. A home is where you lived in 2008 and can
include a house, houseboat, mobile home, cooperative
apartment, condominium, and a manufactured home
that conforms to Federal Manufactured Home
Construction and Safety Standards.
You must reduce the basis of your home by the
amount of any credits allowed.
Main home. Your main home is generally the home
where you live most of the time. A temporary absence
due to special circumstances, such as illness,
education, business, military service, or vacation, will
not change your main home.
Special rules. If you are a member of a condominium
management association for a condominium you own
or a tenant-stockholder in a cooperative housing
corporation, you are treated as having paid your
proportionate share of any costs of such association or
corporation.
Subsidized energy financing. Any amounts provided
for by subsidized energy financing cannot be used to
figure the credit. This is financing provided under a

You may be able to take a credit of 30% of your costs
of qualified solar electric property, solar water heating
property, fuel cell property, small wind energy property,
and geothermal heat pump property. This includes
labor costs properly allocable to the onsite preparation,
assembly, or original installation of the property and for
piping or wiring to interconnect such property to the
home. This credit is limited to:
● $2,000 for qualified solar electric property costs,
● $2,000 for qualified solar water heating property
costs,
● $500 for each one-half kilowatt of capacity of
qualified fuel cell property for which qualified fuel cell
property costs are paid.
● $500 for each one-half kilowatt of capacity of
qualified small wind energy property for which qualified
small wind energy property costs are paid (not to
exceed $4,000), and
● $2,000 for qualified geothermal heat pump property
costs.
Qualified solar electric property costs. Qualified
solar electric property costs are costs for property that
uses solar energy to generate electricity for use in your
home located in the United States. This includes costs
relating to a solar panel or other property installed as a
roof or a portion of a roof. The home does not have to
be your main home.
Qualified solar water heating property costs.
Qualified solar water heating property costs are costs
for property to heat water for use in your home located
in the United States if at least half of the energy used
by the solar water heating property for such purpose is
derived from the sun. This includes costs relating to a
solar panel or other property installed as a roof or a
portion of a roof. To qualify for the credit, the property
must be certified for performance by the nonprofit
Solar Rating Certification Corporation or a comparable
entity endorsed by the government of the state in
which the property is installed. The home does not
have to be your main home.
Qualified fuel cell property costs. Qualified fuel cell
property costs are costs for qualified fuel cell property
installed on or in connection with your main home
located in the United States. Qualified fuel cell property
is an integrated system comprised of a fuel cell stack
assembly and associated balance of plant components
that converts a fuel into electricity using
electrochemical means. To qualify for the credit, the
fuel cell property must have a nameplate capacity of at
least one-half kilowatt of electricity using an
electrochemical process and an electricity-only
generation efficiency greater than 30%.

CAUTION

Costs allocable to a swimming pool, hot tub,
or any other energy storage medium which
has a function other than the function of such
storage do not qualify for the residential
energy efficiency credit.

Form 5695 (2008)

Qualified small wind energy property costs.
Qualified small wind energy property costs are costs
for property that uses a wind turbine to generate
electricity for use in connection with your home located
in the United States. The home does not have to be
your main home.
Qualified geothermal heat pump property costs.
Qualified geothermal heat pump property costs are
costs for qualified geothermal heat pump property
installed on or in connection with your home located in
the United States. Qualified geothermal heat pump
property is any equipment that uses the ground or
ground water as a thermal energy source to heat your
home or as a thermal energy sink to cool your home.
To qualifiy for the credit, the geothermal heat pump
property must meet the requirements of the Energy
Star program that are in effect at the time of purchase.
The home does not have to be your main home.
Married taxpayers with more than one home. If you
or your spouse lived in more than one home, the credit
limits would apply to each of you separately. For
qualified fuel cell property, the homes must be your
main homes. If you are filing separate returns, both of
you must complete a separate Form 5695. If you are
filing a joint return, figure your nonbusiness energy
property credit as follows.
1. Complete a separate Form 5695 for each home
through line 21.
2. On one of the forms, complete line 22. Then, figure
the amount to be entered on line 23 of both forms and
enter the combined amount on line 23 of this form.
3. On the dotted line to the left of the entry space for
line 23, enter “More than one home”. Then, complete
the rest of this form.
4. Attach both forms to your return.
Joint occupancy. If you occupied your home jointly,
each occupant must complete his or her own Form
5695. To figure the credit, the maximum qualifying
costs that can be taken into account by all occupants
for figuring the credit is $6,667 for qualified solar
electric, solar water heating, or geothermal heat pump
property; and $1,667 for each one-half kilowatt of
capacity of qualified fuel cell or small wind energy
property (not to exceed $13,333 for qualified small
wind energy property). The amount allocable to you is
the lesser of:
1. The amount you paid, or
2. The maximum qualifying cost of the property
multiplied by a fraction. The numerator is the amount
you paid and the denominator is the total amount paid
by you and all other occupants.
These rules do not apply to married individuals filing
a joint return.
Example. Taxpayer A owns a house with Taxpayer B
where they both reside. In 2008, they installed qualified
solar water heating property at a cost of $8,000.
Taxpayer A paid $6,000 towards the cost of the
property and Taxpayer B paid the remaining $2,000.
The amount of cost allocable to Taxpayer A is $5,000
($6,667 X $6,000/$8,000). The amount of cost allocable
to Taxpayer B is $1,667 ($6,667 X $2,000/$8,000).

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Specific Instructions
Also include on lines 1, 5, 9, 13, or 18, any
labor costs properly allocable to the onsite
TIP
preparation, assembly, or original installation
of the property and for piping or wiring to
interconnect such property to the home.
Line 1
Enter the amounts you paid for qualified solar electric
property. See Qualified solar electric property costs on
page 3.
Line 5
Enter the amounts you paid for qualified solar water
heating property. See Qualified solar water heating
property costs on page 3.
Line 9
Enter the amounts you paid for qualified fuel cell
property. See Qualified fuel cell property costs on page 3.
Line 13
Enter the amounts you paid for qualified small wind
energy property. See Qualified small wind energy
property costs on this page.
Line 18
Enter the amounts you paid for qualified geothermal
heat pump property. See Qualified geothermal heat
pump property costs on this page.
Line 25
If you are claiming the child tax credit for 2008, include
on this line the amount from line 12 of the Line 11
Worksheet in Pub. 972.

TIP

If you are not claiming the child tax credit for
2008, you do not need Pub. 972.

Line 28
If you cannot use all of the credit because of the tax
liability limit (line 26 is less than line 23), you can carry
the unused portion of the credit to 2009.
Paperwork Reduction Act Notice. We ask for the
information on this form to carry out the Internal
Revenue laws of the United States. You are required to
give us the information. We need it to ensure that you
are complying with these laws and to allow us to figure
and collect the right amount of tax.
You are not required to provide the information
requested on a form that is subject to the Paperwork
Reduction Act unless the form displays a valid OMB
control number. Books or records relating to a form or
its instructions must be retained as long as their
contents may become material in the administration of
any Internal Revenue law. Generally, tax returns and
return information are confidential, as required by
section 6103.
The average time and expenses required to complete
and file this form will vary depending on individual
circumstances. For the estimated averages, see the
instructions for your income tax return.
If you have suggestions for making this form simpler,
we would be happy to hear from you. See the
instructions for your income tax return.