Cross References
• IRC §25C, Nonbusiness Energy Property
• Form 5695, Residential Energy Credits

The nonbusiness energy property credit is scheduled to expire at the end of 2011 so taxpayers only have a short time to take advantage of this credit. The 2011 credit is more limited than in past years but is still available for qualifying improvements placed in service for the taxpayer’s principal residence located in the United States before January 1, 2012.

Principal residence. The taxpayer must own the home and use it as a principal residence.

Credit. The nonbusiness energy property credit is a credit for making qualifying energy efficient home improvements. The tax credit is 10% of the cost (up to $500), or a specific amount, for qualified energy efficient improvements. It must be an existing home and the taxpayer’s principal residence. New construction and rentals do not qualify.