We are in the process of upgrading our DC power supply (inverter, batteries, and solar). While doing the research for this, I remembered that there was some sort of tax credit for energy improvements for your home. I Googled “federal tax credit for solar” and a wealth of results popped up. It appears to me that under certain circumstances, a federal tax credit is available. Note that this is a credit rather than a deduction. (A dollar of credit reduces your tax liability by a dollar; a dollar of deduction generally reduces your tax liability by a smaller percentage of a dollar.) It appears that some states also offer some tax relief for solar. If you are considering adding solar (or if you did in the last several years), you might want to look into whether the tax credits apply to you.
Here is the IRS form with instructions for claiming the tax credit on your 2010 tax return.
It appears that the credit applies to the 2011 tax year as well. It has been in effect for several years so an amended return could be filed if the credit applied but was not taken. I think the rules for the credit for years in the past were slightly different.
The form is confusing (who would have thought that anything dealing with taxes and the IRS is confusing). If you go to page 3 of the instructions, they list the two purposes of the form: (1) The nonbusiness energy property credit, and (2) The residential energy efficient property credit. Forget about the nonbusiness energy property credit if all you want to get a tax credit for solar.
Line 1 asks if the costs were made to your main home. If the answer is no, forget about Part 1 and go to Part 2. If the answer is yes, fill out Part 1 and discover that your nonbusiness energy property credit is zero. Now go to Part 2. Part 2 is where you get to enter the data to determine your residential energy efficient property credit.
I have been told that some tax advisers state that either you must full time in your RV or the credit cannot be applied for solar added to an RV. Here are two exact quotes from the form and instructions you can find at the URL I posted:
“Qualified solar electric property costs. Qualified solar electric property costs are costs for property that uses solar energy to generate electricity for use in your home located in the United States. This includes costs relating to a solar panel or other property installed as a roof or a portion of a roof. The home does not have to be your main home.”
I added the underlining.
“Home. A home is where you lived in 2010 and can include a house, houseboat, mobile home, cooperative apartment, condominium, and a manufactured home that conforms to Federal Manufactured Home Construction and Safety Standards.”
Notice the home CAN include a list of possibilities. It does not say the home must be only one of those listed.
Just for the record, the credit is 30% of expenses including labor and parts. Or put another way, if adding a complete solar system $6,000, getting a 30% brings the cost down to $4,200. I suggest you consult your tax advisor about this.
Here is the IRS form with instructions for claiming the tax credit on your 2010 tax return.
http://www.irs.gov/pub/irs-pdf/f5695.pdf
It appears that the credit applies to the 2011 tax year as well. It has been in effect for several years so an amended return could be filed if the credit applied but was not taken. I think the rules for the credit for years in the past were slightly different.
The form is confusing (who would have thought that anything dealing with taxes and the IRS is confusing). If you go to page 3 of the instructions, they list the two purposes of the form: (1) The nonbusiness energy property credit, and (2) The residential energy efficient property credit. Forget about the nonbusiness energy property credit if all you want to get a tax credit for solar.
Line 1 asks if the costs were made to your main home. If the answer is no, forget about Part 1 and go to Part 2. If the answer is yes, fill out Part 1 and discover that your nonbusiness energy property credit is zero. Now go to Part 2. Part 2 is where you get to enter the data to determine your residential energy efficient property credit.
I have been told that some tax advisers state that either you must full time in your RV or the credit cannot be applied for solar added to an RV. Here are two exact quotes from the form and instructions you can find at the URL I posted:
“Qualified solar electric property costs. Qualified solar electric property costs are costs for property that uses solar energy to generate electricity for use in your home located in the United States. This includes costs relating to a solar panel or other property installed as a roof or a portion of a roof. The home does not have to be your main home.”
I added the underlining.
“Home. A home is where you lived in 2010 and can include a house, houseboat, mobile home, cooperative apartment, condominium, and a manufactured home that conforms to Federal Manufactured Home Construction and Safety Standards.”
Notice the home CAN include a list of possibilities. It does not say the home must be only one of those listed.
Just for the record, the credit is 30% of expenses including labor and parts. Or put another way, if adding a complete solar system $6,000, getting a 30% brings the cost down to $4,200. I suggest you consult your tax advisor about this.