For purposes of the Residential Energy Credit under Form 5695, a “home” is a dwelling unit located in the United States that you used as a residence during the tax year. This includes a house, houseboat, mobile home, cooperative apartment, condominium, or a manufactured home that meets Federal Manufactured Home Construction and Safety Standards. The definition of “home” varies depending on which part of the credit is being claimed.
Eligible Property Types
- Residential Clean Energy Credit (Part I):
Applies to both existing homes and homes under construction. The home may be your main home or a second home, but it must be used as a residence by you and located in the United States. Qualified property includes solar electric property, solar water heating property, small wind energy property, geothermal heat pumps, battery storage technology, and similar clean energy property.
- Energy Efficient Home Improvement Credit (Part II):
Applies only to improvements made to an existing home that is your main home (principal residence). Qualified improvements include insulation, exterior windows and doors, central air conditioners, furnaces, water heaters, and home energy audits.
Key Requirements
- The home must be located in the United States.
- For the Residential Clean Energy Credit, costs are treated as paid when the original use of the property begins (for new construction) or when installation is completed (for existing homes).
- For the Energy Efficient Home Improvement Credit, costs are treated as paid when installation is completed.
- If the property is used for both business and personal purposes, only the nonbusiness-use portion qualifies. If the property is used less than 80% for personal (nonbusiness) purposes, you must allocate the costs between business and personal use.
Source:
Form 5695 Instructions (2025)
Disclaimer: Always verify details with the current IRS forms and instructions or consult a tax professional for personalized advice. State-specific rules may also apply.