You may be eligible for the Residential Clean Energy Credit, which equals up to 30% of the cost of new, qualified clean energy property for private residences. You can learn more here.
Steps to Claim:
➊ Confirm eligibility for your property and energy system.
➋ Purchase and install the qualified system.
➌ Keep all documentation.
➍ Complete and file Form 5695 and Form 1040 with your tax return.
➎ Submit with your tax return, carrying forward any unused credit.
Who Can Qualify?
- Residence Requirements: Must be a primary or second home in the U.S. (second homes must not be rented out). Qualified systems include solar panels, solar water heaters, wind turbines, and geothermal heat pumps. Fuel cells do not qualify for second homes.
- Eligible Home Types: Houses, mobile homes, condos, co-ops, manufactured homes, and houseboats.
- Business Use: Homes with up to 20% business use can claim the full credit; over 20% will have a reduced credit. Homes solely for business use do not qualify.
Other Requirements:
- Federal Tax Liability: You must owe federal income taxes to claim the credit. Unused credits can be carried forward.
- New System Requirement: Systems must be new; used or refurbished systems are not eligible.
- System Ownership: You must own the system. Leasing does not qualify.
- Installation Costs: Eligible expenses include labor for installation and solar-specific components.
Necessary Documents:
- Forms: Complete IRS Form 5695 and attach it to Form 1040.
- Supporting Documentation: Keep receipts, manufacturer's certifications, proof of homeownership, and records of any utility subsidies.
