We have clarified the reporting instructions for joint occupants of a home who are claiming the energy efficient home improvement credit in Part II of the 2023 Form 5695. Please refer to the instructions below with respect to the joint occupancy section on page 3 of the 2023 Instructions for Form 5695. The 2023 Instructions for Form 5695 will not be revised. Joint occupancy. If you occupied your home jointly with someone, each occupant must complete their own Form 5695. To figure the credit, enter the amounts you paid for the items on lines 18a, 19a, 19c, 20a, 22a, 23a, 24a, 25a, 26b, or 29d. If the aggregate credit that would be allowed to all occupants for any item of property exceeds the credit limit below, then you must figure your allocable share of the credit from each property. The credit allocable to you is the credit limit for that 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. Enter the credit allocable to you from that property on lines 18b, 19b, 19d, 20b, 22b, 23b, 24b, 25b, 26c, and 29e. Write "JOP" on the dots beside the relevant line. If the total on line 27 is more than $1,200, then the credit allocable to you is further limited. Multiply $1,200 by a fraction. The numerator is the sum of the amounts on lines 18a, 19a, 19c, 20a, 22a, 23a, 24a, 25a, and 26b. The denominator is the total amount paid by you and all other occupants for the corresponding properties. Enter the result on line 28 and write "JOP" on the dots beside the line. If line 29e is more than $2,000, then the credit allocable to you is further limited. Multiply $2,000 by a fraction. The numerator is the amount on line 29d. The denominator is the total amount paid by you and all other occupants for the item of property. Enter the result on line 29e. The credit limit for each property is as follows. $1,200 for insulation or air sealing material system. $250 for one exterior door and $500 for all exterior doors. $600 for windows. $600 for central air conditioners. $600 for natural gas, propane, or oil water heaters. $600 for natural gas, propane, or oil furnace or hot water boilers. $600 for improvements or replacements of panelboards, subpanelboards, branch circuits, or feeders. $150 for home energy audits. $2,000 for heat pumps and heat pump water heaters; biomass stoves and biomass boilers. For tax year 2023 only, if you are claiming the energy efficient home improvement credit as a joint occupant on Form 5695, please file your tax return on paper. We cannot accept an electronically filed tax return for this situation in 2023.
