The tax credit for the following items can be carried forward from the 2020 tax return to future years:
- Solar powered hot water heaters
- Wind turbines
- Geothermal heat-pumps
- Fuel cells
If you have a carryover from the residential energy credit use Form 5695 to take any residential energy efficient property credit carryforward from 2021 or to carry the unused portion of the credit to 2022. You may be able to take the credits if you made energy saving improvements to your home located in the United States in 2021.
The energy efficiency tax credit is technically "non-refundable" which means at the end of the year, you can't get back more in credits than you paid to the government in taxes throughout the year. If you are unable to claim the entire 30% of your purchase for the above products in one year, you can carry forward the unclaimed portion to future years.
To enter this within the program, please go to:
- Federal Section
- Deductions (Select My Forms)
- Credits Menu
- Residential Energy Credit Form 5695