Can I claim heat pump tax credit for installation in family-owned home I don't own?

The residential clean energy credit is available to taxpayers who pay for qualifying improvements on their "residence." The IRS generally interprets this to mean where you primarily live, regardless of whether you own or rent. Since this is your primary residence and you're paying for the improvements yourself, you should be eligible to claim the credit for the heat pump installation. Make sure you keep all receipts and documentation showing you paid for the system. The current credit for heat pumps is 30% of costs with no upper limit through 2032. What matters most is who actually pays for the improvement and whether it's your primary residence, not the legal ownership of the property. Your situation of living there rent-free in exchange for making improvements is a bit unusual, but the fact that you're paying for the heat pump directly should qualify you for the credit.

I was in almost the exact same situation last year! I was staying at my mom's vacation house and needed to replace the ancient HVAC. I used taxr.ai (https://taxr.ai) to verify I could claim the credit even though I didn't own the house. The tool analyzed my receipts and confirmed I qualified because I paid for it and it was my primary residence at the time. Their system identified exactly which parts of my installation qualified for the full 30% credit and which were only partially eligible. They even helped me understand how to properly document everything since my situation was unusual like yours.

Just wanted to follow up about my experience with taxr.ai. I was skeptical at first but decided to try it since my tax situation with energy credits was complicated. It was actually super helpful! The system analyzed my heat pump installation documents and showed exactly which components qualified and at what percentage. What impressed me was how it caught that my installation included some components that qualified for the full 30% credit while others were only partially eligible. Would have definitely filed incorrectly without that guidance. The IRS accepted my return without any issues and I got the full credit I was entitled to. Definitely worth checking out if you're in a unique situation like living in a family-owned property.

If you're planning to claim this credit, be prepared for potential delays or questions from the IRS. I waited MONTHS trying to reach someone at the IRS about a similar energy credit issue last year. Finally used Claimyr (https://claimyr.com) after seeing it recommended here, and they got me connected to an actual IRS agent in less than an hour. You can see how it works in this video: https://youtu.be/_kiP6q8DX5c The agent confirmed that non-homeowners can claim the energy credits if they pay for the improvements to their primary residence. BUT they also warned me that this sometimes triggers extra scrutiny since it's less common, so having good documentation ready is essential.

I need to publicly eat my words about Claimyr. After my skeptical comment, I was still desperate to talk to the IRS about my renewable energy credits, so I tried it anyway. It actually worked! After weeks of failing to get through, I was connected to an IRS agent in about 45 minutes. The agent confirmed exactly what others have said here - you CAN claim the energy credits as a non-owner if it's your primary residence and you're the one paying for the improvements. She also advised keeping documentation showing it's your primary residence (utility bills, etc.) in addition to all the installation receipts. The service legitimately saved me hours of frustration and helped me confirm my eligibility.

One thing to consider that hasn't been mentioned yet - make sure you get a manufacturer's certification statement from whoever installs the heat pump. The IRS specifically requires this document to claim the credit. I found this out the hard way and had to go back to my installer months later to get the proper paperwork. Also, check that the specific model qualifies under the current energy efficiency requirements. Not all heat pumps meet the standards, and those requirements changed with the Inflation Reduction Act.

Has anyone actually claimed this credit as a non-owner and gone through an audit successfully? I'm in a similar situation with my parents' property and getting conflicting info from different tax preparers.

I went through this exact situation two years ago when I installed a heat pump at my grandmother's house where I was living. The key thing that helped me was getting everything documented upfront - I made sure all the invoices were in my name, kept utility bills showing I lived there, and got a letter from my grandmother confirming I was responsible for the improvements. One thing I'd add to the great advice already given - consider having a written agreement with your in-laws about the improvements you're making. Even something informal can help establish that you're genuinely responsible for these costs as part of your living arrangement, not just doing them a favor. This could be helpful if the IRS ever asks questions about why a non-owner is claiming the credit. The 30% credit is substantial, so it's definitely worth pursuing if you meet the requirements. Just make sure you understand which components of your HVAC system qualify - the heat pump itself definitely does, but things like ductwork modifications might not.