Eligibility criteria of Residential Energy Credits isn’t clear in Turbotax

Forum|Forum|1 year ago
March 16, 2025
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I own a single family home in California that I have been renting out the last 20+ years while living overseas. During 2024, I installed a new 200A Main Panel, Heat Pump Water Heater, and Heat Pump HVAC incl. all new ductwork.

As part of the IRA, I was under the impression that I would be eligible for a 30% federal tax credit (The California IRA rebates program was not yet active at time of installation).

However, I struggle with the wording of completing the Turbotax EasyStep. The home is located in the US, but where I personally live is NOT in the US. Turbotax has my overseas address and when I select YES, it doesn’t point out that I’m not eligible for this credit. When I select NO, it says that the improvements were NOT made in the US, but that is INCORRECT. The house is in California.

Thus my confusion….here is the screen print when I answer NO:

When I read the IRS Instructions for Form 5695, it defines a Home as where you lived in 2024, and goes on to define your Main Home as generally the home where you live most of the time.

Any thoughts/hints? I didn't find anything about this in FAQ's but maybe am looking in the wrong place.

Thanks!

Best answer by MindyB

Based on the information you provided, you are not eligible for the Energy Efficient Home Improvement Credit, because the improvement was made to a rental property, not your home.

From the IRS: "The credit is never available for homes not used as a residence by the taxpayer. For example, landlords can never use the credit for homes they rent out but do not use as a residence themselves."

MindyBAnswer

Based on the information you provided, you are not eligible for the Energy Efficient Home Improvement Credit, because the improvement was made to a rental property, not your home.