The residential energy credit, specifically the energy efficient home improvement credit (Part II of Form 5695), is only available for improvements made to your main home located in the United States. The IRS defines your main home as the residence you use for the majority of the year and consider your primary residence. The credit is not available for upgrades made to a second home or any other property that is not your main home.
Key Requirements for Eligibility
- Main home requirement: The improvements must be made to your main home. This is explicitly stated in the instructions for Line 17a of Form 5695: “To qualify for the credit, any qualified energy efficiency improvements must have been for your main home located in the United States.”
- Location: The home must be located in the United States.
- Original use: The qualified energy property must have been originally placed in service by you (not previously used by another owner).
What Is Covered Under the Credit?
The energy efficient home improvement credit allows a 30% credit on qualified expenses, up to a total of $1,200 for most improvements, with separate limits for certain items:
- Insulation, air sealing, exterior doors, windows, skylights, central air conditioners, water heaters, furnaces, and electrical panel upgrades.
- Heat pumps and heat pump water heaters have a separate annual limit of $2,000.
- Home energy audits are eligible for a $150 credit.
Source:
Form 5695 Instructions (2025)
Disclaimer: Always verify eligibility and requirements with the current IRS Form 5695 and its instructions, or consult a tax professional. State-specific rules may also apply.