Residential Energy Credits Form 5695 OMB No. 1545-0074

Department of the Treasury

Internal Revenue Service

1 Were the qualified energy efficiency improvements or residential energy property costs for your

main home located in the United States? (see instructions) ©

2a

2 Qualified energy efficiency improvements (see instructions).

4

3

5a

4

5b

6

Multiply line 3 by 10% (.10)

5c

7

8

9 9

10

11 11

15

7

Nonbusiness energy property credit. Enter the smaller of line 11 or line 14

For Paperwork Reduction Act Notice, see instructions. Cat. No. 13540P Form 5695 (2007)

10

© See instructions.

Attachment

Sequence No. 158 © Attach to Form 1040 or Form 1040NR.

Yes No

Caution: If you checked the “No” box, you cannot claim the nonbusiness energy property credit. 

Do not complete Part I.

a Insulation material or system specifically and primarily designed to reduce heat loss or gain in

your home

b Exterior doors

c Metal roof with appropriate pigmented coatings that meet the Energy Star program requirements 

and is specifically and primarily designed to reduce heat gain in your home

d Exterior windows (including skylights)

2b

2c

Add lines 2a, 2b, 2c, and 2h 3

5 Residential energy property costs (see instructions).

a Energy-efficient building property. Do not enter more than $300

b Qualified natural gas, propane, or oil furnace or hot water boiler. Do

not enter more than $150 

c Advanced main air circulating fan used in a natural gas, propane, or

oil furnace. Do not enter more than $50

6 Add lines 5a through 5c

Add lines 4 and 6

Maximum credit amount. (If you jointly occupied the home, see instructions)

Enter the amount, if any, from your 2006 Form 5695, line 8. Otherwise, enter -0-

Subtract line 9 from line 8

Enter the smaller of line 7 or line 10 

8

Name(s) shown on return Your social security number

Part I Nonbusiness Energy Property Credit (See instructions before completing this part.)

2007

e Maximum amount of cost on which the credit can be figured

f Enter the amount, if any, from your 2006 Form 5695, line 2b. Otherwise, 

enter -0-

g Subtract line 2f from line 2e

h Enter the smaller of line 2d or line 2g

2d

2f

2g

2e

2h

Enter the amount from Form 1040, line 46, or Form 1040NR, line 43

Enter the total, if any, of your credits from Form 1040, lines 47 through 

49, and lines 51 and 53, or Form 1040NR, lines 44, 46, and 48

12

13

12

13

14

15

Subtract line 13 from line 12. If zero or less, stop. You cannot take the nonbusiness energy

property credit 14

1

$2,000

$500

Before you begin Part I: Figure the amount of any foreign tax credit or retirement savings contributions credit you

are claiming.
Form 5695 (2007) Page 2

Before you begin Part II: Figure the amount of any of the following credits you are claiming.

Form 5695 (2007)

Part II

19

16 16

18

23

Qualified solar electric property costs

17

26

27

28

31

33

32 32

27

1040 filers: Enter the total, if any, of your credits from Form

1040, lines 47 through 49, and lines 51, 53, and 54; line 15 of

this form; and line 12 of the Line 11 Worksheet in Pub. 972 (see

instructions).

29

17 Multiply line 16 by 30% (.30)

Enter the smaller of line 17 or line 18

Qualified solar water heating property costs

Multiply line 20 by 30% (.30)

19

Maximum credit amount

Enter the smaller of line 21 or line 22

Qualified fuel cell property costs

Multiply line 24 by 30% (.30)

Kilowatt capacity of property on line 24 above © X $1,000

Enter the smaller of line 25 or line 26

28

Residential Energy Efficient Property Credit (See instructions before completing this part.)

18 Maximum credit amount

20

21

22

23

24

25

20

22

21

24

26

25

Credit carryforward from 2006. Enter the amount, if any, from your 2006 Form 5695, line 30

29 Add lines 19, 23, 27, and 28

31

1040NR filers: Enter the total, if any, of your credits from Form

1040NR, lines 44, 46, 48, and 49; line 15 of this form; and line 12

of the Line 11 Worksheet in Pub. 972 (see instructions).

%

Subtract line 31 from line 30. If zero or less, enter -0- here and on line 33

$2,000

$2,000

30 Enter the amount from Form 1040, line 46, or Form 1040NR, line 43 30

33 Residential energy efficient property credit. Enter the smaller of line 29 or line 32

34 Credit carryforward to 2008. If line 33 is less than line 29, subtract line 

33 from line 29 34

.

Part III Current Year Residential Energy Credits

35 Add lines 15 and 33. Enter here and on Form 1040, line 50, or Form 1040NR, line 45 35

● Foreign tax credit

● Child tax credit

● Retirement savings contributions credit

● Mortgage interest credit

● Adoption credit

● District of Columbia first-time homebuyer credit
Form 5695 (2007) Page 3

General Instructions

Section references are to the Internal Revenue Code.

Purpose of Form

Use Form 5695 to figure and take your residential

energy credits. The residential energy credits are:

● The nonbusiness energy property credit, and

● The residential energy efficient property credit.

Who Can Take the Credits

You may be able to take these credits if you made

energy saving improvements to your home located in

the United States in 2007. For credit purposes, costs

are treated as being paid when the original installation

of the item is completed, or in the case of costs

connected with the construction or reconstruction of

your home, when your original use of the constructed

or reconstructed home begins. If less than 80% of the

use of an item is for nonbusiness purposes, only that

portion of the costs that are allocable to the

nonbusiness use can be used to determine the credit.

Home. A home is where you lived in 2007 and may

include a house, houseboat, mobile home, cooperative

apartment, condominium, and a manufactured home

that conforms to Federal Manufactured Home

Construction and Safety Standards.

You must reduce the basis of your home by the

amount of any credits allowed.

Main home. Your main home is generally the home

where you live most of the time. A temporary absence

due to special circumstances, such as illness,

education, business, military service, or vacation, will

not change your main home.

Special rules. If you are a member of a condominium

management association for a condominium you own

or a tenant-stockholder in a cooperative housing

corporation, you are treated as having paid your

proportionate share of any costs of such association or

corporation.

Subsidized energy financing. Any amounts provided

for by subsidized energy financing cannot be used to

figure the credits. This is financing provided under a

federal, state, or local program, the principal purpose

of which is to provide subsidized financing for projects

designed to conserve or produce energy.

Nonbusiness Energy Property Credit

You may be able to take a credit equal to the sum of:

1. 10% of the amount paid or incurred for qualified

energy efficiency improvements installed during 2007,

and

2. Any residential energy property costs paid or

incurred in 2007.

● A total combined credit limit of $500 for all tax years

after 2005.

Qualified energy efficiency improvements. Qualified

energy efficiency improvements are the following

building envelope components installed on or in your

main home that you owned during 2007 located in the

United States if these components are new and can be

expected to remain in use for at least 5 years.

● Any insulation material or system that is specifically

and primarily designed to reduce the heat loss or gain

of a home when installed in or on such home.

● Exterior windows (including certain storm windows

and skylights).

● Exterior doors (including certain storm doors).

● Any metal roof installed on a home, but only if this

roof has appropriate pigmented coatings that are

specifically and primarily designed to reduce the heat

gain of the home.

For purposes of figuring the credit, do not include

amounts paid for the onsite preparation, assembly, or

original installation of the property.

To qualify for the credit, qualified energy

efficiency improvements must meet certain

energy efficiency requirements. See Lines 2a

Through 2h on page 5 for details. CAUTION

● A combined credit limit of $200 for windows for all

tax years after 2005.

Residential energy property costs. Residential energy

property costs are costs of new qualified energy

property that is installed on or in connection with your

main home that you owned during 2007 located in the

United States. This includes labor costs properly

allocable to the onsite preparation, assembly, or

original installation of the property. Qualified residential

energy property is any of the following.

● Certain electric heat pump water heaters; electric

heat pumps; geothermal heat pumps; central air

conditioners; and natural gas, propane, or oil water

heaters.

● Qualified natural gas, propane, or oil furnaces or hot

water boilers.

● Certain advanced main air circulating fans used in

natural gas, propane, or oil furnaces.

CAUTION

To qualify for the credit, qualified residential

energy property must meet certain

performance and quality standards. See Lines

5a Through 5c on page 5 for details.

However, this credit is limited as follows.

Joint ownership of qualifying property. If you and a

neighbor shared the cost of qualifying property to

benefit each of your main homes, both of you may

take the nonbusiness energy property credit. You

figure your credit on the part of the cost you paid. The

limits on the amount of the credit apply to each of you

separately.

● A credit limit for residential energy property costs for

all tax years after 2005 of $50 for any advanced main

air circulating fan; $150 for any qualified natural gas,

propane, or oil furnace or hot water boiler; and $300

for any item of energy efficient building property.

If you took the nonbusiness energy property

credit in 2006 and the amount on your 2006

Form 5695, line 8, is $500, you cannot take

the credit in 2007. CAUTION
Form 5695 (2007) Page 4

Costs allocable to a swimming pool, hot tub,

or any other energy storage medium which

has a function other than the function of such

storage do not qualify for the residential

energy efficiency credit.

Qualified solar water heating property costs.

Qualified solar water heating property costs are costs

for property to heat water for use in a home located in

the United States and used as your home if at least

half of the energy used by the solar water heating

property for such purpose is derived from the sun. This

includes costs relating to a solar panel or other

property installed as a roof or a portion of a roof. To

qualify for the credit, the property must be certified for

performance by the nonprofit Solar Rating Certification

Corporation or a comparable entity endorsed by the

government of the state in which the property is

installed. The home does not have to be your main

home.

● $500 for each one-half kilowatt of capacity of

qualified fuel cell property for which qualified fuel cell

property costs are paid.

Qualified solar electric property costs. Qualified

solar electric property costs are costs for property that

uses solar energy to generate electricity for use in a

home located in the United States and used as your

home. This includes costs relating to a solar panel or

other property installed as a roof or a portion of a roof.

The home does not have to be your main home.

CAUTION

Residential Energy Efficient Property Credit

You may be able to take a credit of 30% of your costs

of qualified solar electric property, solar water heating

property, and fuel cell property. This includes labor

costs properly allocable to the onsite preparation,

assembly, or original installation of the property and for

piping or wiring to interconnect such property to the

home. This credit is limited to:

● $2,000 for qualified solar electric property costs,

● $2,000 for qualified solar water heating property

costs, and

1. Complete Part I of a separate Form 5695 for each

main home through line 7.

2. Figure the amount to be entered on line 7 of both

forms (not more than $500 for each form) and enter

the combined amount on line 7 of one of the forms.

4. On the dotted line to the left of line 8, enter “More

than one main home”. Then, complete the rest of this

form.

5. Attach both forms to your return.

1. The amount you paid, or

2. The maximum qualifying cost* of the property

multiplied by a fraction. The numerator is the amount

you paid and the denominator is the total amount paid

by you and all other owners.

Joint occupancy. If you owned your home jointly,

each owner must complete his or her own Form 5695.

To figure the credit, there are no maximum qualifying

costs for insulation, exterior doors, and a metal roof.

Enter the amounts you paid for these items on the

appropriate lines of Form 5695. For windows and

residential energy property costs, the amount allocable

to you is the smaller of:

*$2,000 for windows; $300 for energy-efficient

building property; $150 for a qualified natural gas,

propane, or oil furnace or hot water boiler; or $50 for

an advanced main air circulating fan.

Qualified fuel cell property costs. Qualified fuel cell

property costs are costs for qualified fuel cell property

installed on or in connection with your main home

located in the United States. Qualified fuel cell property

is an integrated system comprised of a fuel cell stack

assembly and associated balance of plant components

that converts a fuel into electricity using

electrochemical means. To qualify for the credit, the

fuel cell property must have a nameplate capacity of at

least one-half kilowatt of electricity using an

electrochemical process and an electricity-only

generation efficiency greater than 30%.

Married taxpayers with more than one home. If you

or your spouse lived in more than one home that you

used as a home, the credit limits would apply to each

of you separately. For qualified fuel cell property, the

homes must be your main homes. If you are filing

separate returns, both of you must complete a

separate Form 5695. If you are filing a joint return,

figure your nonbusiness energy property credit as

follows.

1. Complete Part II of a separate Form 5695 for each

home through line 27.

2. On one of the forms, complete line 28. Then,

figure the amount to be entered on line 29 of both

forms and enter the combined amount on line 29 of

this form.

3. On the dotted line to the left of the entry space for

line 29, enter “More than one home”. Then, complete

the rest of this form.

4. Attach both forms to your return.

Joint occupancy. If you occupied your home jointly,

each occupant must complete his or her own Form

5695. To figure the credit, the maximum qualifying

costs that can be taken into account by all occupants

for figuring the credit is $6,667 for qualified solar

electric or solar water heating property, and $1,667 for

each one-half kilowatt of capacity of qualified fuel cell

property. The amount allocable to you is the lesser of:

1. The amount you paid, or

2. The maximum qualifying cost of the property

multiplied by a fraction. The numerator is the amount

you paid and the denominator is the total amount paid

by you and all other occupants.

These rules do not apply to married individuals filing

These rules do not apply to married individuals filing

a joint return.

Married taxpayers with more than one main home.

If both you and your spouse owned and lived apart in

separate main homes, the credit limits would apply to

each of you separately. If you are filing separate

returns, both of you would complete a separate Form

5695. If you are filing a joint return, figure your

nonbusiness energy property credit as follows.

3. On line 8 of the form with the combined amount

on line 7, cross out the preprinted $500 and 

enter $1,000.
Form 5695 (2007) Page 5

Line 2b. Enter the amounts you paid for exterior doors

that meet or exceed the criteria established by the

IECC for the climate zone in which such doors were

installed. Also, enter the amounts you paid for any

storm door that, in combination with a wood door

assigned a default U-factor by the IECC, does not

exceed the default U-factor requirement assigned to

such combination by the IECC.

TIP

Line 2c. Enter the amounts you paid for a metal roof,

but only if this roof has appropriate pigmented

coatings, which are specifically and primarily designed

to reduce the heat gain of the home, and such roof

meets or exceeds the Energy Star program

requirements (in effect at the time of installation).

Line 2d. Enter the amounts you paid for exterior

windows (including any storm windows installed with

such exterior windows) and skylights that meet or

exceed the criteria established by the IECC for the

climate zone in which these components were

installed.

Manufacturer’s certification. For purposes of taking

the credit, you may rely upon a manufacturer’s

certification in writing that a building envelope

component is an eligible building envelope component.

Do not attach the certification to your return. Keep it

for your records.

Special rule for Energy Star windows and

skylights. You may rely upon the Energy Star label

that identifies any window or skylight as an eligible

building envelope component rather than the

manufacturer’s certification.

Lines 5a Through 5c

Also include on lines 5a through 5c any labor

costs properly allocable to the onsite

preparation, assembly, or original installation

of the property.

Line 5a. Enter the amounts you paid for

energy-efficient building property. Energy-efficient

building property is any of the following.

● An electric heat pump water heater that yields an

energy factor of at least 2.0 in the standard

Department of Energy test procedure.

● An electric heat pump that has a heating seasonal

performance factor (HSPF) of at least 9, a seasonal

energy efficiency rating (SEER) of at least 15, and an

energy efficiency rating (EER) of at least 13.

A component is not specifically and primarily

designed to reduce heat loss or gain of a

home if it provides structural support or a

finished surface (such as drywall or siding) or

its principal purpose is to serve any function unrelated

to the reduction of heat loss or heat gain.

CAUTION

Lines 2a Through 2h

Note. Any references to the International Energy

Conservation Code (IECC) are treated as references to

either the 2001 Supplement of the 2000 International

Energy Code or the 2004 Supplement of the 2003

International Energy Conservation Code.

Do not include on lines 2a through 2d any

amounts paid for the onsite preparation,

assembly, or original installation of the

components. CAUTION

Line 2a. Enter the amounts you paid for any insulation

material or system (including any vapor retarder or seal

to limit infiltration) that is specifically and primarily

designed to reduce the heat loss or gain of a home

when installed in or on such home and may be taken

into account in determining whether the building

thermal envelope requirements established by the

IECC are satisfied.

● A direct expansion geothermal heat pump that has an

EER of at least 15 and a heating COP of at least 3.5.

● A central air conditioner that achieves the highest

efficiency tier that has been established by the

Consortium of Energy Efficiency and is in effect on

January 1, 2006.

● A natural gas, propane, or oil water heater that has

an energy factor of at least 0.80.

Do not enter more than $300 on line 5a.

Line 5b. Enter the amounts you paid for a natural gas,

propane, or oil furnace or hot water boiler that

achieves an annual fuel utilization efficiency rate of at

least 95. Do not enter more than $150 on line 5b.

Line 5c. Enter the amounts you paid for an advanced

main air circulating fan used in a natural gas, propane,

or oil furnace that has an annual electricity use of no

more than 2% of the total annual site energy use of

the furnace (as determined in the standard Department

of Energy test procedure). Do not enter more than $50

on line 5c.

Manufacturer’s certification. For purposes of taking

the credit, you may rely upon a manufacturer’s

certification in writing that a product is qualified

residential energy property. Do not attach the

certification to your return. Keep it for your records.

● A closed loop geothermal heat pump that has an

EER of at least 14.1 and a heating coefficient of

performance (COP) of at least 3.3.

● An open loop geothermal heat pump that has an

EER of at least 16.2 and a heating COP of at least 3.6.

Specific Instructions

Part I

Nonbusiness Energy Property Credit

Line 1

To qualify for the credit, any qualified energy efficiency

improvements or residential energy property costs

must have been for your main home located in the

United States. See Main home on page 3. If you check

the “No” box, you cannot take the nonbusiness energy

property credit.

If you took the credit for windows in 2006

and the amount on your 2006 Form 5695,

line 2b, is $2,000, you cannot take the credit

for windows in 2007. CAUTION
Also include on lines 16, 20, or 24, any labor

costs properly allocable to the onsite

preparation, assembly, or original installation

of the property and for piping or wiring to interconnect

such property to the home.

Page 6

Line 16

Enter the amounts you paid for qualified solar electric

property. See Qualified solar electric property costs on

page 4.

Line 20

Enter the amounts you paid for qualified solar water

heating property. See Qualified solar water heating

property costs on page 4.

Line 24

Enter the amounts you paid for qualified fuel cell

property. See Qualified fuel cell property costs on page 4.

Line 34

If you cannot use all of the credit because of the tax

liability limit (line 32 is less than line 29), you can carry

the unused portion of the credit to 2008.

Paperwork Reduction Act Notice. We ask for the

information on this form to carry out the Internal

Revenue laws of the United States. You are required to

give us the information. We need it to ensure that you

are complying with these laws and to allow us to figure

and collect the right amount of tax.

You are not required to provide the information

requested on a form that is subject to the Paperwork

Reduction Act unless the form displays a valid OMB

control number. Books or records relating to a form or

its instructions must be retained as long as their

contents may become material in the administration of

any Internal Revenue law. Generally, tax returns and

return information are confidential, as required by

section 6103.

The average time and expenses required to complete

and file this form will vary depending on individual

circumstances. For the estimated averages, see the

instructions for your income tax return.

If you have suggestions for making this form simpler,

we would be happy to hear from you. See the

instructions for your income tax return.

Form 5695 (2007)

Line 8

If the rules on page 4 for joint occupancy apply, cross

out the preprinted $500 on line 8 and enter on line 8

the smaller of:

1. The amount on line 7, or

2. $500 multiplied by a fraction. The numerator is the

amount on line 7, and the denominator is the total

amount from line 7, for all owners.

Part II

Residential Energy Efficient Property Credit

TIP

For more details, see Joint occupancy in the first

column on page 4.

Line 31

If you are claiming the child tax credit for 2007, include

on this line the amount from line 12 of the Line 11

Worksheet in Pub. 972.

If you are not claiming the child tax credit for TIP 2007, you do not need Pub. 972.