Tax Credit Form
Form 5695 (2012)
Page 4
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 2012, they installed qualified fuel cell property at a
cost of $20,000 with a kilowatt capacity of 5. Taxpayer A paid
$12,000 towards the cost of the property and Taxpayer B paid the
remaining $8,000. The amount to be allocated is $16,670 ($1,667 x
10 (kilowatt capacity x 2)). The amount of cost allocable to Taxpayer
A is $10,002 ($16,670 x $12,000/$20,000). The amount of cost
allocable to Taxpayer B is $6,668 ($16,670 x $8,000/$20,000).
Nonbusiness Energy Property Credit (Part II)
You may be able to take a credit equal to the sum of:
1. 10% of the amount paid or incurred for qualified energy
efficiency improvements installed during 2012, and
2. Any residential energy property costs paid or incurred in 2012.
However, this credit is limited as follows.
• A total combined credit limit of $500 for all tax years after 2005.
• A combined credit limit of $200 for windows for all tax years after
2005.
• A credit limit for residential energy property costs for 2012 of $50
for any advanced main air circulating fan; $150 for any qualified
natural gas, propane, or oil furnace or hot water boiler; and $300 for
any item of energy efficient building property.
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CAUTION
If the total of any nonbusiness energy property credits
you have taken in previous years (after 2005) is more
than $500, you generally cannot take the credit in 2012.
Subsidized energy financing. Any amounts provided for by
subsidized energy financing cannot be used to figure the
nonbusiness energy property credit. This is financing provided
under a federal, state, or local program, the principal purpose of
which is to provide subsidized financing for projects designed to
conserve or produce energy.
Qualified energy efficiency improvements. Qualified energy
efficiency improvements are the following building envelope
components installed on or in your main home that you owned
during 2012 located in the United States if the original use of the
component begins with you, the component can be expected to
remain in use at least 5 years, and the component meets certain
energy standards.
• Any insulation material or system that is specifically and primarily
designed to reduce heat loss or gain of a home when installed in or
on such a home.
• Exterior windows and skylights.
• Exterior doors.
• Any metal roof with appropriate pigmented coatings or asphalt
roof with appropriate cooling granules that are specifically and
primarily designed to reduce the heat gain of your home.
For purposes of figuring the credit, do not include amounts paid
for the onsite preparation, assembly, or original installation of the
building envelope component.
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CAUTION
To qualify for the credit, qualified energy efficiency
improvements must meet certain energy efficiency
requirements. See Lines 21a Through 21h, later, for
details.
Residential energy property costs. Residential energy property
costs are costs of new qualified energy property that is installed on
or in connection with your main home that you owned during 2012
located in the United States. Include any labor costs properly
allocable to the onsite preparation, assembly, or original installation
of the energy property. Qualified residential energy property is any
of the following.
• Certain electric heat pump water heaters; electric heat pumps;
central air conditioners; natural gas, propane, or oil water heaters;
and stoves that use biomass fuel.
• Qualified natural gas, propane, or oil furnaces and qualified natural
gas, propane, or oil hot water boilers.
• Certain advanced main air circulating fans used in natural gas,
propane, or oil furnaces.
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CAUTION
To qualify for the credit, qualified residential energy
property must meet certain energy efficiency
requirements. See Lines 24a Through 24c, later, for
details.
Joint ownership of qualified property. If you and a neighbor
shared the cost of qualifying property to benefit each of your main
homes, both of you can take the nonbusiness energy property
credit. You figure your credit on the part of the cost you paid. The
limit on the amount of the credit applies to each of you separately.
Married taxpayers with more than one home. If both you and
your spouse owned and lived apart in separate main homes, the
limit on the amount of the credit applies to each of you separately. If
you are filing separate returns, both of you would complete a
separate Form 5695. If you are filing a joint return, figure your
nonbusiness energy property credit as follows.
1. Complete lines 19a through 19c and 21 through 26 of a
separate Form 5695 for each main home.
2. Figure the amount to be entered on line 26 of both forms (but
not more than $500 for each form) and enter the combined amount
on line 26 of one of the forms.
3. On line 27 of the form with the combined amount on line 26,
cross out the preprinted $500 and enter $1,000.
4. On the dotted line to the left of line 27, enter “More than one
main home.” Then, complete the rest of this form, including lines
20a through 20f. The amount on line 20f can exceed $500.
5. Attach both forms to your return.
Joint occupancy. If you owned your home jointly with someone
other than your spouse, each owner must complete his or her own
Form 5695. To figure the credit, there are no maximum qualifying
costs for insulation, exterior doors, and a metal or asphalt roof.
Enter the amounts you paid for these items on the appropriate lines
of Form 5695, Part II. For windows and residential energy property
costs, the amount allocable to you is the smaller 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 owners.
*$2,000 for windows; $300 for energy-efficient building property;
$150 for qualified natural gas, propane, or oil furnace or hot water
boiler; or $50 for an advanced main air circulating fan.
Specific Instructions
Part I
Residential Energy Efficient Property Credit
Before you begin Part I:
Figure the amount of any of the following credits you are claiming.
• Credit for the elderly or the disabled.
• Nonbusiness energy property credit (Part II of this form).
• Adoption credit.
• Mortgage interest credit.
• District of Columbia first-time homebuyer credit.
• Alternative motor vehicle credit.
• Qualified plug-in electric vehicle credit.
• Qualified plug-in electric drive motor vehicle credit.