Documentation Need to Claim the Residential Energy Tax Credit


U.S. homeowners can still receive federal tax credits when they make energy efficient home improvement purchases as of 2011, but they must keep detailed records of purchases and installation costs in case the Internal Revenue Service, or IRS, decides to audit their tax return, according to Energy Star. Homeowners do not have to attach these documents to IRS Form 5695 when they claim their credit.


Manufacturers offer certification statements to homeowners so they can prove their residential home improvement purchase meets energy efficiency requirements set by the U.S. government. For example, installed windows must have a U-factor of 0.30 or less and a solar heat gain coefficient of 0.30 or less, according to the IRS.

Homeowners can usually download a certification statement from the manufacturer’s website, or they can request their installer provide them with a signed copy proving the installer installed a qualifying product.


Homeowners must keep receipts from their home improvement purchases to qualify for residential energy tax credits. They may choose to keep an electronic receipt if they purchase energy efficient products online, and those who purchase supplies at building supply stores should keep their paper receipts. Credit card statements, bank records and check copies will not suffice as evidence of purchase and installation costs, because these records do not typically show the IRS the products that the homeowner purchased.


If a homeowner has a contractor purchase and install the product on his behalf, he should request a detailed invoice from the contractor that outlines both purchase price and installation costs, because he cannot usually take a credit for costs paid for assembly, on-site preparation and installation of home improvements.

If she pays for the installation of fuel cells; a gas, propane or oil hot water heater or boiler; geothermal heat pumps; small wind turbines; or solar energy systems, she can claim installation charges for the residential energy tax credit and should keep records of these costs, according to Energy Star.


During an audit process, the IRS will either randomly or intentionally scrutinize a taxpayer’s previous year returns. Homeowners who cannot prove their purchases and installations to the IRS when audited can face civil penalties for not keeping their receipts and will have to pay back the total amount of the credit. They only need keep their receipts, statements and invoices for three years after they file their current tax return, as the IRS does not audit tax returns after this time, except in the case of suspected fraud.

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