Form 5695

Department of the Treasury 

Internal Revenue Service 

Residential Energy Credits

▶ See instructions.

▶ Attach to Form 1040 or Form 1040NR.

OMB No. 1545-0074

2010

Attachment 

Sequence No. 158

Name(s) shown on return Your social security number

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

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

main home located in the United States? (see instructions) . . . . . . . . . . . . ▶ 1 Yes No

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

Do not complete Part I.

2 Qualified energy efficiency improvements (see instructions).

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

your home . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2a 

b Exterior windows (including certain storm windows) and skylights . . . . . . . . . . . 2b

c Exterior doors (including certain storm doors) . . . . . . . . . . . . . . . . . . 2c 

d Metal roof with appropriate pigmented coatings or asphalt roof with appropriate cooling granules 

that are specifically and primarily designed to reduce the heat gain of your home, and the roof 

meets or exceeds the Energy Star program requirements in effect at the time of purchase or 

installation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2d

3 Residential energy property costs (see instructions).

a Energy-efficient building property . . . . . . . . . . . . . . . . . . . . . . 3a 

b Qualified natural gas, propane, or oil furnace or hot water boiler . . . . . . . . . . . . 3b

c Advanced main air circulating fan used in a natural gas, propane, or oil furnace . . . . . . . 3c 

4 Add lines 2a through 3c . . . . . . . . . . . . . . . . . . . . . . . . . 4 

5 Multiply line 4 by 30% (.30) . . . . . . . . . . . . . . . . . . . . . . . . 5 

6 Maximum credit amount. (If you jointly occupied the home, see instructions) . . . . . . . . 6 $1,500

7 Enter the amount, if any, from your 2009 Form 5695, line 11. Otherwise enter -0- . . . . . . 7 

8 Subtract line 7 from line 6 . . . . . . . . . . . . . . . . . . . . . . . . 8 

9 Enter the smaller of line 5 or line 8 . . . . . . . . . . . . . . . . . . . . . 9 

10 Limitation based on tax liability. Enter the amount from the Credit Limit Worksheet (see 

instructions) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 

11 Nonbusiness energy property credit. Enter the smaller of line 9 or line 10. Also include this

amount on Form 1040, line 52, or Form 1040NR, line 49 . . . . . . . . . . . . . . 11 

For Paperwork Reduction Act Notice, see your tax return instructions. Cat. No. 13540P Form 5695 (2010)
Form 5695 (2010) Page 2 

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

Note. Skip lines 12 through 21 if you only have a credit carryforward from 2009.

12 Qualified solar electric property costs . . . . . . . . . . . . . . . . . . . . 12 

13 Qualified solar water heating property costs . . . . . . . . . . . . . . . . . . 13 

14 Qualified small wind energy property costs . . . . . . . . . . . . . . . . . . . 14 

15 Qualified geothermal heat pump property costs . . . . . . . . . . . . . . . . . 15 

16 Add lines 12 through 15 . . . . . . . . . . . . . . . . . . . . . . . . . 16 

17 Multiply line 16 by 30% (.30) . . . . . . . . . . . . . . . . . . . . . . . 17 

18 Qualified fuel cell property costs . . . . . . . . . . . . . 18 

19 Multiply line 18 by 30% (.30) . . . . . . . . . . . . . . 19 

20 Kilowatt capacity of property on line 18 above ▶ . x $1,000 20 

21 Enter the smaller of line 19 or line 20 . . . . . . . . . . . . . . . . . . . . . 21 

22 Credit carryforward from 2009. Enter the amount, if any, from your 2009 Form 5695, line 28 . . 22

23 Add lines 17, 21, and 22 . . . . . . . . . . . . . . . . . . . . . . . . . 23 

24 Enter the amount from Form 1040, line 46, or Form 1040NR, line 44 . 24 

25 1040 filers: Enter the total, if any, of your credits from Form 1040, 

lines 47 through 50; line 11 of this form; line 12 of the Line 11 

worksheet in Pub. 972 (see instructions); Form 8396, line 9; 

Form 8859, line 3; Form 8834, line 22; Form 8910, line 21; 

Form 8936, line 14; and Schedule R, line 22.

1040NR filers: Enter the amount, if any, from Form 1040NR, lines 

45 through 47; line 11 of this form; line 12 of the Line 11

worksheet in Pub. 972 (see instructions); Form 8396, line 9; 

Form 8859, line 3; Form 8834, line 22; Form 8910, line 21; and 

Form 8936, line 14.

} 25 

26 Subtract line 25 from line 24. If zero or less, enter -0- here and on line 27 . . . . . . . . . 26 

27 Residential energy efficient property credit. Enter the smaller of line 23 or line 26. Also include

this amount on Form 1040, line 52, or Form 1040NR, line 49 . . . . . . . . . . . . . 27 

28 Credit carryforward to 2011. If line 27 is less than line 23, subtract line 

27 from line 23 . . . . . . . . . . . . . . . . . . . 28 

Form 5695 (2010)
Form 5695 (2010) Page 3 

General Instructions

Section references are to the Internal Revenue Code.

What's New

Nonbusiness energy property credit. The nonbusiness energy 

property (NBEP) credit has been extended for property placed in service 

in 2011. However, any NBEP credit for which you might be eligible for 

NBEP improvements in 2011 may be limited, or you may be allowed no 

NBEP credit at all for 2011 NBEP improvements. For 2011 NBEP 

improvements, the maximum NBEP credit allowed is $500 reduced (but 

not below zero) by the total of your NBEP credits for 2006 through 2010. 

In addition, the credit allowed for windows for 2011 is limited to $200 

reduced (but not below zero) by the total of your credits for windows 

from 2006 through 2010.

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.

Also use Form 5695 to take any residential energy efficient property 

credit carryforward from 2009 or to carry the unused portion of the 

credit to 2011.

Who Can Take the Credits

You may be able to take the credits if you made energy saving 

improvements to your home located in the United States in 2010.

Home. A home is where you lived in 2010 and can 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.

Costs. For purposes of both credits, costs are treated as being paid 

when the original installation of the item is completed, or in the case of 

costs connected with the reconstruction of your home, when your 

original use of the reconstructed home begins. For purposes of the 

residential energy efficient property credit only, costs connected with 

the construction of a home are treated as being paid when your original 

use of the constructed home begins. If less than 80% of the use of an 

item is for nonbusiness purposes, only that portion of the costs that is 

allocable to the nonbusiness use can be used to determine either credit.

▲!

CAUTION

The nonbusiness energy property credit is only available for 

existing homes. Only the residential energy efficient 

property credit is available for both existing homes and 

homes being constructed.

Association or cooperative costs. 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.

▲!

CAUTION

If you received a subsidy from a public utility for the 

purchase or installation of an energy conservation product 

and that subsidy was not included in your gross income, 

you must reduce your cost for the product by the amount 

 of that subsidy before you compute your credit. This rule 

 also applies if a third party (such as a contractor) receives the subsidy 

on your behalf.

Nonbusiness Energy Property Credit

You may be able to take a credit of 30% of the costs paid or incurred in 

2010 for any qualified energy efficiency improvements and any

residential energy property. The credit is limited to a total of $1,500 over 

tax years 2009 and 2010.

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 2010 located in the

United States if the original use of the component begins with you and 

the component can be expected to remain in use at least 5 years.

• Any insulation material or system that is specifically and primarily 

designed to reduce heat loss or gain of a home when installed in or on 

such a home.

• Exterior windows (including certain storm windows) and skylights.

• Exterior doors (including certain storm doors).

• Any metal roof with appropriate pigmented coatings or asphalt roof 

with appropriate cooling granules that are specifically and primarily 

designed to reduce the heat gain of your home, and the roof meets or 

exceeds the Energy Star program requirements in effect at the time of 

purchase or installation.

For purposes of figuring the credit, do not include amounts paid for 

the onsite preparation, assembly, or original installation of the building 

envelope component.

▲!

CAUTION

To qualify for the credit, qualified energy efficiency 

improvements must meet certain energy efficiency 

requirements. See Lines 2a Through 2d on page 4 for 

details.

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 2010 located in 

the United States. Include any labor costs properly allocable to the 

onsite preparation, assembly, or original installation of the energy 

property. Qualified residential energy property is any of the following.

• Certain electric heat pump water heaters; electric heat pumps; central 

air conditioners; natural gas, propane, or oil water heaters; and stoves 

that use biomass fuel.

• Qualified natural gas, propane, or oil furnaces and qualified natural 

gas, propane, or oil 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 energy efficiency requirements. 

See Lines 3a Through 3c that begins on page 4 for details.

Joint ownership of qualified property. If you and a neighbor shared 

the cost of qualifying property to benefit each of your main homes, both

of you can take the nonbusiness energy property credit. You figure your 

credit on the part of the cost you paid. The limit on the amount of the 

credit applies to each of you separately.

Married taxpayers with more than one home. If both you and your 

spouse owned and lived apart in separate main homes, the limit on the 

amount of the credit applies 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.

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

through line 5.

2. Figure the amount to be entered on line 5 of both forms (but not 

more than $1,500 for each form) and enter the combined amount on line 

5 of one of the forms.

3. On line 6 of the form with the combined amount on line 5, cross out 

the preprinted $1,500 and enter $3,000.

4. On the dotted line to the left of line 6, enter “More than one main 

home.” Then, complete the rest of this form.

5. Attach both forms to your return.

Joint occupancy. If you owned your home jointly with someone other 

than your spouse, each owner must complete his or her own Form 

5695. Your credit is limited to the smaller of:

1. The amount you paid, or

2. $1,500 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.

These rules do not apply to married individuals filing a joint return.
Form 5695 (2010) Page 4 

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, small wind energy 

property, geothermal heat pump property, and fuel cell property. Include 

any labor costs properly allocable to the onsite preparation, assembly, 

or original installation of the residential energy efficient property and for 

piping or wiring to interconnect such property to the home. The credit 

amount for costs paid for qualified fuel cell property is limited to $500 

for each one-half kilowatt of capacity of the property.

Qualified solar electric property costs. Qualified solar electric 

property costs are costs for property that uses solar energy to generate 

electricity for use in your home located in the United States. 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.

Qualified solar water heating property costs. Qualified solar water 

heating property costs are costs for property to heat water for use in 

your home located in the United States 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.

Qualified small wind energy property costs. Qualified small wind 

energy property costs are costs for property that uses a wind turbine to 

generate electricity for use in connection with your home located in the 

United States. The home does not have to be your main home.

Qualified geothermal heat pump property costs. Qualified geothermal 

heat pump property costs are costs for qualified geothermal heat pump 

property installed on or in connection with your home located in the 

United States. Qualified geothermal heat pump property is any 

equipment that uses the ground or ground water as a thermal energy 

source to heat your home or as a thermal energy sink to cool your

home. To qualifiy for the credit, the geothermal heat pump property 

must meet the requirements of the Energy Star program that are in 

effect at the time of purchase. The home does not have to be your main 

home.

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%.

▲!

CAUTION

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.

Joint occupancy. If you occupied your home jointly with someone other 

than your spouse, 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 qualified fuel cell property costs 

is $1,667 for each one-half kilowatt of capacity of the property. The 

amount allocable to you for qualified fuel cell property costs 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 a joint return.

Example. Taxpayer A owns a house with Taxpayer B where they both 

reside. In 2010, they installed qualified fuel cell property at a cost of 

$20,000 with a kilowatt capacity of 5. Taxpayer A paid $12,000 towards 

the cost of the property and Taxpayer B paid the remaining $8,000. The 

amount to be allocated is $16,670 ($1,667 x 10 (kilowatt capacity x 2)). 

The amount of cost allocable to Taxpayer A is $10,002 ($16,670 x 

$12,000/$20,000). The amount of cost allocable to Taxpayer B is $6,668 

($16,670 x $8,000/$20,000).

Specific Instructions

Part I

Lines 2a Through 2d

Nonbusiness Energy Property Credit

Before you begin Part I:

Figure the amount of any credit for the elderly or the disabled you are 

claiming.

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.

Note. Unless otherwise noted, any references to the International 

Energy Conservation Code (IECC) are treated as references to the 2001 

Supplement of the 2000 IECC, the 2004 Supplement of the 2003 IECC, 

or the 2009 IECC. However, a reference to the 2009 IECC is a reference 

only to the 2009 International Energy Conservation Code.

▲!

CAUTION

Do not include on lines 2a through 2d any amounts paid for 

the onsite preparation, assembly, or original installation of 

the components.

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 

your home when installed in or on such home and meets the 

prescriptive criteria established by the 2009 IECC as in effect (with 

supplements) on February 17, 2009. 

▲!

CAUTION

A component is not specifically and primarily designed to 

reduce the heat loss or gain of your 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 gain.

Line 2b. Enter the amounts you paid for exterior windows (including any 

storm windows installed with such exterior windows) and skylights that 

meet the prescriptive criteria established by the IECC for such 

components and have a U-factor of 0.30 or less and a solar heat gain 

coefficient (SHGC) of 0.30 or less. 

Line 2c. Enter the amounts you paid for exterior doors that meet the 

prescriptive criteria established by the IECC for such components and 

have a U-factor of 0.30 or less and an SHGC of 0.30 or less. 

Line 2d. Enter the amounts you paid for a metal roof with the 

appropriate pigmented coatings or an asphalt roof with the appropriate 

cooling granules that are specifically and primarily designed to reduce 

the heat gain of your home, and the roof meets or exceeds the Energy 

Star program requirements in effect at the time of purchase or

installation.

Manufacturer’s certification. For purposes of taking the credit, you 

can rely on 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.

Lines 3a Through 3c

TIP

Also include on lines 3a through 3c any labor costs 

properly allocable to the onsite preparation, assembly, or 

original installation of the property.

Line 3a. 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 achieves the highest efficiency tier 

established by the Consortium for Energy Efficiency (CEE) as in effect 

on January 1, 2009.

• A central air conditioner that achieves the highest efficiency tier that 

has been established by the CEE as in effect on January 1, 2009.
Form 5695 (2010) Page 5 

• A natural gas, propane, or oil water heater that has an energy factor of 

at least 0.82 or a thermal efficiency of at least 90%.

• A stove that uses the burning of biomass fuel to heat your home or 

heat water for your home that has a thermal efficiency rating of at least 

75% as measured by using a lower heating value. Biomass fuel is any 

plant-derived fuel available on a renewable or recurring basis, including 

agricultural crops and trees, wood and wood waste and residues 

(including wood pellets), plants (including aquatic plants), grasses, 

residues, and fibers.

Line 3b. Enter the amounts you paid for a natural gas or propane 

furnace that achieves an annual fuel utilization efficiency rate of at least 

95 and for a natural gas, propane, or oil hot water boiler or oil furnace 

that achieves an annual fuel utilization efficiency rate of at least 90.

Line 3c. 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 energy use 

of the furnace (as determined in the standard Department of Energy test

procedures).

Manufacturer’s certification. For purposes of taking the credit, you 

can rely on 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.

Line 6

If the rules on page 3 for joint occupancy apply, cross out the preprinted 

$1,500 on line 6 and enter on line 6 the smaller of:

1. The amount on line 4, or

2. $1,500 multiplied by a fraction. The numerator is the amount on 

line 4. The denominator is the total amount from line 4 for all owners.

For more details, see Joint occupancy on page 3.

Line 10

Complete the worksheet below to figure the amount to enter on line 10.

Credit Limit Worksheet—Line 10

1. Enter the amount from Form 1040, line 46, or 

Form 1040NR, line 44 . . . . . . . 1.

2. Enter the total, if any, of your credits from Form 

1040, lines 47 through 50, and Schedule R, line 

22; or Form 1040NR, lines 45 through 47 . 2.

3. Subtract line 2 from line 1. Also enter this 

amount on Form 5695, line 10. If zero or less, 

stop; you cannot take the nonbusiness energy 

property credit . . . . . . . . . 3.

Part II

Residential Energy Efficient Property Credit

Before you begin Part II:

Figure the amount of any of the following credits you are claiming.

• Credit for the elderly or the disabled.

• Mortgage interest credit.

• District of Columbia first-time homebuyer credit.

• Alternative motor vehicle credit.

• Qualified plug-in electric vehicle credit.

• Qualified plug-in electric drive motor vehicle credit.

TIP

Also include on lines 12 through 15, and 18, 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.

Line 12

Enter the amounts you paid for qualified solar electric property. See 

Qualified solar electric property costs on page 4.

Line 13

Enter the amounts you paid for qualified solar water heating property. 

See Qualified solar water heating property costs on page 4.

Line 14

Enter the amounts you paid for qualified small wind energy property. 

See Qualified small wind energy property costs on page 4.

Line 15

Enter the amounts you paid for qualified geothermal heat pump 

property. See Qualified geothermal heat pump property costs on page 4.

Line 18

Enter the amounts you paid for qualified fuel cell property. See Qualified 

fuel cell property costs on page 4.

Line 25

If you are claiming the child tax credit for 2010, include on this line the 

amount from line 12 of the Line 11 Worksheet in Pub. 972.

TIP

If you are not claiming the child tax credit for 2010, you do 

not need Pub. 972.

Manufacturer’s certification. For purposes of taking the credit, you 

can rely on the manufacturer’s certification in writing that a product is 

qualifying property for the credit. Do not attach the certification to your 

return. Keep it for your records.

Line 28

If you cannot use all of the credit because of the tax liability limit (line 26 

is less than line 23), you can carry the unused portion of the credit to 

2011.

File this form even if you cannot use any of your credit in 2010.