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Lev
Lev, Tax Advisor
Category: Tax
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In 2015, I purchased a new energy efficient hot water heater

Customer Question

In 2015, I purchased a new energy efficient hot water heater and completely updated my home's heating and air conditioning system to an energy efficient whole house heating/air conditioning system. The hot water heater was $900 and the whole house unit was $10,498. Where do these amounts go on the 2015 Form 5695, Residential Energy Credit form?
Submitted: 9 months ago.
Category: Tax
Expert:  Lev replied 9 months ago.

You may not claim that credit in 2015.

It used to be here in prior years - but has been expired.

Customer: replied 9 months ago.
When I purchased the unit and the hot water heater, both products have stickers and documentation that they qualify for residential energy credit? What is the story?
Expert:  Lev replied 9 months ago.

Stickers and documentation are correct - products do qualify for the credit.

But the credit has been expired and was not extended - you may not claim that credit on 2015 tax return - that is why there is no space on that form to claim that credit.

You would easily identify that space on form 5695 for prior years.

But there is NO such credit for 2015.

Sorry if you expected differently.

Customer: replied 9 months ago.
Wow! Yes, I am disappointed. When did the credit expire?
Expert:  Lev replied 9 months ago.

See here information regarding existing energy efficiency tax credits for 2015

https://www.energystar.gov/about/federal_tax_credits/2015_federal_tax_credits

Customer: replied 9 months ago.
Lev, the information you provide shows there is a credit available for 2015.
Expert:  Lev replied 9 months ago.

extended the expiration date of tax credits for some energy efficiency - which are listed below -

specifically for water heater - see here

https://www.energystar.gov/about/federal_tax_credits/water_heaters_non_solar

See requirements - they are much higher that were for prior year credit.

Electric heat pump:
Energy factor > 2.0

Gas, oil or propane:
Energy factor > 0.82 or Thermal efficiency of at least 90%

Customer: replied 9 months ago.
I see. I'll check the factors to see if they are within range. Thank you for your help.
Expert:  Lev replied 9 months ago.

See for instance following IRS page
https://www.irs.gov/uac/Cut-Taxes-and-Save-on-Energy-Bills-with-Home-Energy-Credits
Non-Business Energy Property Credit -- This credit had expired at the end of 2013. The Tax Increase Prevention Act extended it to apply for one year, through Dec. 31, 2014. You may still claim the credit on your 2014 tax return if you didn’t reach the lifetime limit in prior years.
This credit was not extended for 2015.
Part of this credit is worth 10 percent of the cost of certain qualified energy-saving items you added to your main home last year. This may include items such as insulation, windows, doors and roofs.
The other part of the credit is not a percentage of the cost. This part of the credit is for the actual cost of certain property. This may include items such as water heaters and heating and air conditioning systems. The credit amount for each type of property has a different dollar limit.
.
HOWEVER see page 83 in this document
The Protecting Americans from Tax Hikes Act of 2015
http://docs.house.gov/billsthisweek/20151214/121515.250_xml.pdf
SEC. 181. EXTENSION AND MODIFICATION OF CREDIT FOR NONBUSINESS ENERGY PROPERTY.
(a) EXTENSION.—Section 25C(g)(2) is amended by striking ‘‘December 31, 2014’’ and inserting ‘‘December 31, 2016’’.

So far that provision was extended - and you may claim teh credit on your tax return 5695 was updated - see here
https://www.irs.gov/pub/irs-pdf/f5695.pdf
and you report deductible expenses on line 19.
Sorry for confusion.

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