U.S. · Form 5695 line 31
Form 5695 line 31 tax liability limit.
The cap on the energy efficient home improvement credit.
Form 5695 line 31 is “Limitation based on tax liability”: the amount from the Energy Efficient Home Improvement Credit Limit Worksheet. It is Form 1040 line 18 minus a shorter list of credits than the clean energy worksheet. Line 32 is the smaller of line 30 or line 31, and goes on Schedule 3, line 5b. The 2025 instructions say you can’t claim this credit for expenditures or property placed in service after December 31, 2025.
Run the worksheet and lines 28 to 32
Result
Reference table
| Line | What it holds |
|---|---|
| Line 28 | The smaller of line 27 or $1,200. |
| Line 29h | 30% of line 29g, no more than $2,000. |
| Line 30 | Lines 28 and 29h added. |
| Line 31 | Limitation based on tax liability (worksheet). |
| Line 32 | The smaller of line 30 or line 31; to Schedule 3 line 5b. |
What the worksheet subtracts
Line 1 is Form 1040 line 18. Line 2 totals the credits you take from this list: Schedule 3 line 6l, foreign tax credit (line 1), child or dependent care expenses credit (line 2), credit for the elderly or disabled (line 6d), nonrefundable education credits (line 3) and retirement savings contributions credit (line 4). Line 3 is line 1 minus line 2, and it is line 31. If it is zero or less, enter -0- on lines 31 and 32. This list is shorter than the one on the residential clean energy worksheet (line 14), which also subtracts credits such as the child tax credit.
The two dollar limits
Under the 2025 rules the instructions describe a 30% credit with an annual limit of $1,200 for the combined improvement and property lines in line 27 (windows, doors, insulation, central air conditioners, certain water heaters, furnaces and boilers, enabling property, home energy audits), and a separate annual limit of $2,000 for heat pumps, heat pump water heaters and biomass stoves and boilers. Line 28 caps the first group and line 29h caps the second.
Worked example
Line 27 totals $1,500, so line 28 is $1,200. Heat pump costs of $9,000 give 30% of $2,700, capped at $2,000 on line 29h, so line 30 is $3,200. With Form 1040 line 18 at $10,000 and no listed credits, line 31 is $10,000 and line 32 is $3,200. If line 31 were only $2,500, line 32 would be $2,500. All figures are illustrative.
Limits of this page
You enter lines 27 and 29g from the earlier lines; the page does not figure the per-item limits on lines 18 to 26. The instructions state the credit ends for expenditures or property placed in service after December 31, 2025. Qualification rules, certification numbers and the joint occupant limits are in the instructions.
Sources
- Instructions for Form 5695 (2025): Line-by-line instructions, worksheets and limits. Read November 2, 2026.
- Form 5695 (2025): The form itself, for exact line wording. Read November 2, 2026.
These are the tax year 2025 edition instructions and forms (published for returns filed in 2026). The IRS revises them each year, so thresholds, line numbers and limits can change; check the current edition before relying on a figure.
Frequently asked questions
What is line 31 on Form 5695?
The limitation based on tax liability for the energy efficient home improvement credit, from the Energy Efficient Home Improvement Credit Limit Worksheet.
How is line 32 figured?
It is the smaller of line 30 or line 31, and is entered on Schedule 3 (Form 1040), line 5b.
What are the annual dollar limits?
Line 28 is limited to $1,200, and line 29h (heat pumps, heat pump water heaters, biomass stoves and boilers) to $2,000.
What if the worksheet result is zero or less?
Enter -0- on Form 5695 lines 31 and 32.
Which tax year is this?
The 2025 edition of Form 5695 and its instructions.
Not tax or legal advice
This page summarizes IRS instructions and is not tax, legal or financial advice. A CPA, enrolled agent or the IRS can confirm what applies to your situation. Everything runs in your browser; nothing you enter is sent anywhere.