Energy Credits

[gman]

What line on the 5695 would you put the cost of an energy efficient Heat & A/C unit?

[solomon]

3a..................

[DMICPA]

Energy Material Portion Allowed only?

Residential Energy Credit

The credit is only allowed for the amounts paid or incurred to purchase the products. The credit is not allowed for amounts paid or incurred for onsite preparation, assembly, or original installation of the components. (IRS Notice 2009-53.)

Client bought windows at Home Depot. Home Depot separately listed the total cost AND the materials only cost which they say is the portion the credit is allowed on.

Another client comes in and bought insulation. He only has a sales receipt for how much the job costs. There is no breakdown on the material portion. The Contractor is unresponsive to the materials only portion. The Home Depot receipt says that 60% of insulation bought at Home Depot is materials and the rest is installation.

Normally, you would just take the total cost but the Home Depot breakdown and the above IRS notice has me questioning the proper amount that qualifies.

Should I just take the total amount or only 60% as per the Home Depot IRS reasoning.

Is everyone just using the total cost? Is that correct???

Help

[Davc]

Using the total is definitely incorrect. If he paid through HD for both the materials and the labor then use the HD allocation. If you haven't seen the manufacturers certificate for the insulation I wouldn't take it at all.

[Gene V]

What line on the 5695 would you put the cost of an energy efficient Heat & A/C unit?

From instruction Form 5695

Also include on lines 3a through 3c any labor costs properly allocable to the onsite preparation, assembly, or original installation of the property.

[AJsTax]

Energy efficient alone

does not qualify a furnace and AC unit. most do not qualify.
And be careful which ones can use the total cost and which ones can use only materials cost.
The very best place for all that information is Energystar.gov..click on the 1040 button in lower left of main screen and read, read, read, it is all there including the changes for 2011
Just an example, a gas furnace rated at 94.5 does not qualify, 95 does.
Almost none of the oil furnaces can, even tho they are energy efficient.
No hot water heater with a storage tank qualifies.
and on and on.

[Gary2]

Using the total is definitely incorrect. If he paid through HD for both the materials and the labor then use the HD allocation. If you haven't seen the manufacturers certificate for the insulation I wouldn't take it at all.

Most certification statements are easily available online.

In the particular case of insulation (at least for the sorts in common usage here in the northeast), pretty much any structural insulation - fiberglass batting, recycled material batting, or blow-in - will qualify. It's not like windows or doors, where there's a broad variety of products with various energy ratings. As long as you can recognize that it's structural insulation (and not a can of spray foam or something designed for a limited purpose), it's not worth demanding the certification.

[DMICPA]

Insulation Energy Credit

I had a client spend thousands on insulation that qualify for the energy credit. I noted that the installation does not count towards the credit. The Company that sold the insulation did not provide a breakdown on labor etc. on the invoice.

I called the Company and they said that "there is no charge for installation" therefore, the entire cost of the insulation is elgible for the credit.

Hey, what else can I do except take the full cost for the energy credit.