Free 2008 Form 5695 - Federal

Form

5695

Residential Energy Efficient Property Credit
See instructions. Attach to Form 1040 or Form 1040NR.

OMB No. 1545-0074

Department of the Treasury Internal Revenue Service

Name(s) shown on return

Attachment Sequence No. 158 Your social security number

2008

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.
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 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 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 Credit carryforward to 2009. If line 27 is less than line 23, subtract line 27 from line 23 28
Form

4

8

12

17

21 22 23

26 27 28

26 27

For Paperwork Reduction Act Notice, see instructions.

Cat. No. 13540P

5695

(2008)

[ This page left blank intentionally ]

Form 5695 (2008)

Page

3

General Instructions
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
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.

Residential Energy Efficient Property Credit
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%. 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.

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

CAUTION

Form 5695 (2008)

Page

4

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).

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.