I'm sorry, but this video has some wrong information. At 1:02, the video incorrectly says that as a requirement to claim the tax credit, "The system is located at your residence in the United States". The truth is that there is no requirement for where the system must be located. Section 26 USC Section 25D(d)(2) states the requirements and says ""qualified solar electric property expenditure" means an expenditure for property which uses solar energy to generate electricity for use in a dwelling unit located in the United States and used as a residence by the taxpayer." Notice that there isn't any requirement for where the system must be located. The IRS Form 5695 instructions also do not specify a location. In IRS Private Letter Ruling 201536017, the IRS said that buying solar panels away from the taxpayer's home can qualify for the tax credit. At 1:05, the video incorrectly says that as a requirement to claim the tax credit, "You owe income tax for 2022". The truth is that owing any income tax isn't a requirement either. Notice that the language in Section 26 USC Section 25D(d)(2) doesn't mention "owing income tax." While a taxpayer with no tax liability cannot USE the tax credit, USING the tax credit to reduce tax liability and being eligible to legally CLAIM the tax credit are two entirely different things. At 2:58 the video incorrectly says "You cannot take a credit in excess of what your tax liability is for the year" The truth is that you can take a tax credit in excess of your tax liability and the excess amount will carryforward. The video should have said "You cannot USE a credit in excess of what your tax liability is for THAT year, but you can carryforward that excess." At 4:02 the video incorrectly says "The remainder will rollover for a maximum of five years." The truth is that there is no limit for the rollover. Section 26 USC Section 25D(c) authorizes the carryforward/rollover and doesn't mention any limit. Form 5695 and the instructions also do not mention any carryforward limit nor does IRS Notice 2013-70, A-3 or IRS FS-2022-40, page 6. As a matter of comparison, the adoption tax credit does have a carryforward limit as specified under 26 USC Section 23(c)(2). Naturally, the IRS Form 8839 instructions have a line 16 worksheet addressing the carryforward limit for the adoption tax credit. Conversely, the tax credit for solar doesn't have any of those carryforward limits or corresponding documents. If you read Form 5695, the tax credits can be carried forward indefinitely so long as the taxpayer keeps filing a new Form 5695 each year indicating the carryforward.
Hi @sirmontego! Thanks for your input earlier. We find your points valid but at the same time, we feel that most of them are relatively minor and the video remains helpful for the majority of viewers the way it is. We shouldn't have missed the point about the 5-year rollover though. Nevertheless, we do appreciate your contribution.
Do you know whether a person can claim the credit more than once? For example, if they buy solar for one house then moves and buy solar in their new primary home.
@@jpyang05 There is no limit as to how many times someone can claim the tax credit for solar. The law, 26 USC Section 25D, does not specify any lifetime or annual limits for the solar tax credit. The 2023 instructions to Form 5695 say "If you made energy saving improvements to more than one home that you used as a residence during 2023, enter the total of those costs on the applicable line(s) of one Form 5695." IRS Private Letter Ruling 201809003, page 4, says " Earlier installations of qualifying property do not affect the availability of the credit for qualifying property in later years." So install solar on your current home and claim the tax credit, move, install solar on that second home and claim the tax credit for that installation, move again, and keep installing solar and keep claiming the tax credit for each new solar installation until the tax credit expires at the end of 2034, unless the law gets amended.
I got my solar in 2019, but was not able to use it bc I always got a refund for the exception of 2022. Can I use it to pay my 2022 and 2023 tax liabilities.
@@jpyang05 You can claim the tax credit more than once, but each claim must be for a different expenditure because 26 USC Section 25D applies on a per-expenditure basis. So if you pay for solar panels on your home, you can claim that. Then if you pay for more solar panels on your home or a diffenent home, you can claim that too because it is a different expenditure. In IRS Private Letter Ruling 201809003, the IRS said "Earlier installations of qualifying property do not affect the availability of the credit for qualifying property in later years."
I had a re-roofing done together with the Solar Panel installation, can I use the full price they charged me or do I have to figure out the amount of the Solar Panels alone?
Generally, roofing materials do not qualify for tax credit - unless you have installed solar shingles, tesla roof or something like that. Read more here: www.irs.gov/newsroom/energy-incentives-for-individuals-residential-property-updated-questions-and-answers
My solar system install has been completed in September. But I’m still waiting for the town installation and the PTO. Do I file this year or next year.
That's actually a very good question! The taxable year to claim and apply the tax credit is the year the "installation of the solar system is completed." Unfortunately, the IRS does not exactly clarify what 'being completed' means - does it mean 'installed' or 'put in service'? My guess, and what most of my collegues in solar sales and PV installation believe, is that yes, you can claim ITC this year - it shouldn't be a problem. After all, the system is completed so it makes sense. I also suggest checking out this thread on Reddit - there are people discussing the same problem as you have: www.reddit.com/r/solar/comments/yo7g32/comment/ivdsugt/?context=3
What type of documentation i need to have in order to probe that my system is operating if I installed myself and not a contractor? What type of documentation i need to have to support the solar tax credit? thanks
was it an off-grid system? did you have to get permits to install it? to claim ITC, you generally only need IRS Form 5695 and Schedule 3 (Form 1040) if it's a home system. but keep the receipts for all of your equipment as a support if the IRS decides to check.
@@a1solarstore not off-grid. i read that the system needs to be operational to claim the credit, what documents is required that is operational? thanks for your comment!
Would I qualify for the federal tax credit if I pay a 3rd party (Plastiq) with a credit card and then Plastiq issued a check on my behalf to the solar company? Note I am the owner of the panels.
Well, even if you have claimed Solar Tax Credit for panels already installed, it shouldn't get in the way of getting itc for new ones. "Earlier installations of qualifying property do not affect the availability of the credit for qualifying property in later years. - www.irs.gov/pub/irs-wd/201809003.pdf#page=4 So i'd say, treat these added panels and the labor to install them as a cost of a new system. It would be reasonable to subtract the parts that you have claimed itc for - like an inverter, if you're keeping the old one. oh, and ask your new contractor about it as well.
You can find the form online. Solar companies will probably tell you about ITC but they usually don't take part in claiming it unless it's in a contract or unless it's a lease.
The loan was 46000 and I was told I was getting back 14000 but I only got 800 plus CPS 3000 what happens to the rest of the money and do I get all in one payment or have to wait for many years
can you please clarify 30 percent federal solar tax credit if its on the total value of net installation cost or minus Renewable Energy Credit ? For example if the installation cost without any incentive is 30 k and then you get energy credit 15K ... is 30 percent calculated on 30 k or 15k for federal tax credit ?
I'm not sure what renewable energy credit you're referring to. Renewable energy credits are something you earn while producing clean electricity but they don't lower the upfront costs (check here: en.wikipedia.org/wiki/Renewable_energy_credit), so they won't have an impact on the cost of installation.
you mean 'installed'? Technically, your system was completed last year. If I were you, I would claim it this year. Check out this thread on Reddit - there are people discussing the same problem as you have: www.reddit.com/r/solar/comments/yo7g32/comment/ivdsugt/?context=3
![Commercial Solar Tax Benefits Explained [Federal Solar Tax Credit & Depreciation]](http://i.ytimg.com/vi/A0OK1hTMUy0/mqdefault.jpg)
I love the FAQ section you added; very good.
My tax guy just completed my 2023 taxes and I'm getting the full ITC for my system, $15K+. It was easy peasy.
Your system was ~ 45k? My system was 40k I had 20k taxes in withheld should I be able get it all??
How? I am on TurboTax and it keeps wanting to carry it forward
Good for all beginners, " May Neighborhood credit unions, Non- interest base to helpful each others .thanks
I'm sorry, but this video has some wrong information.
At 1:02, the video incorrectly says that as a requirement to claim the tax credit, "The system is located at your residence in the United States". The truth is that there is no requirement for where the system must be located. Section 26 USC Section 25D(d)(2) states the requirements and says ""qualified solar electric property expenditure" means an expenditure for property which uses solar energy to generate electricity for use in a dwelling unit located in the United States and used as a residence by the taxpayer." Notice that there isn't any requirement for where the system must be located. The IRS Form 5695 instructions also do not specify a location. In IRS Private Letter Ruling 201536017, the IRS said that buying solar panels away from the taxpayer's home can qualify for the tax credit.
At 1:05, the video incorrectly says that as a requirement to claim the tax credit, "You owe income tax for 2022". The truth is that owing any income tax isn't a requirement either. Notice that the language in Section 26 USC Section 25D(d)(2) doesn't mention "owing income tax." While a taxpayer with no tax liability cannot USE the tax credit, USING the tax credit to reduce tax liability and being eligible to legally CLAIM the tax credit are two entirely different things.
At 2:58 the video incorrectly says "You cannot take a credit in excess of what your tax liability is for the year" The truth is that you can take a tax credit in excess of your tax liability and the excess amount will carryforward. The video should have said "You cannot USE a credit in excess of what your tax liability is for THAT year, but you can carryforward that excess."
At 4:02 the video incorrectly says "The remainder will rollover for a maximum of five years." The truth is that there is no limit for the rollover. Section 26 USC Section 25D(c) authorizes the carryforward/rollover and doesn't mention any limit. Form 5695 and the instructions also do not mention any carryforward limit nor does IRS Notice 2013-70, A-3 or IRS FS-2022-40, page 6. As a matter of comparison, the adoption tax credit does have a carryforward limit as specified under 26 USC Section 23(c)(2). Naturally, the IRS Form 8839 instructions have a line 16 worksheet addressing the carryforward limit for the adoption tax credit. Conversely, the tax credit for solar doesn't have any of those carryforward limits or corresponding documents. If you read Form 5695, the tax credits can be carried forward indefinitely so long as the taxpayer keeps filing a new Form 5695 each year indicating the carryforward.
Hi @sirmontego! Thanks for your input earlier. We find your points valid but at the same time, we feel that most of them are relatively minor and the video remains helpful for the majority of viewers the way it is. We shouldn't have missed the point about the 5-year rollover though. Nevertheless, we do appreciate your contribution.
Do you know whether a person can claim the credit more than once? For example, if they buy solar for one house then moves and buy solar in their new primary home.
@@jpyang05 There is no limit as to how many times someone can claim the tax credit for solar. The law, 26 USC Section 25D, does not specify any lifetime or annual limits for the solar tax credit.
The 2023 instructions to Form 5695 say "If you made energy saving improvements to more than one home that you used as a residence during 2023, enter the total of those costs on the applicable line(s) of one Form 5695."
IRS Private Letter Ruling 201809003, page 4, says " Earlier installations of qualifying property do not affect the availability of the credit for qualifying property in later years."
So install solar on your current home and claim the tax credit, move, install solar on that second home and claim the tax credit for that installation, move again, and keep installing solar and keep claiming the tax credit for each new solar installation until the tax credit expires at the end of 2034, unless the law gets amended.
I got my solar in 2019, but was not able to use it bc I always got a refund for the exception of 2022. Can I use it to pay my 2022 and 2023 tax liabilities.
@@jpyang05 You can claim the tax credit more than once, but each claim must be for a different expenditure because 26 USC Section 25D applies on a per-expenditure basis. So if you pay for solar panels on your home, you can claim that. Then if you pay for more solar panels on your home or a diffenent home, you can claim that too because it is a different expenditure. In IRS Private Letter Ruling 201809003, the IRS said "Earlier installations of qualifying property do not affect the availability of the credit for qualifying property in later years."
I had a re-roofing done together with the Solar Panel installation, can I use the full price they charged me or do I have to figure out the amount of the Solar Panels alone?
Generally, roofing materials do not qualify for tax credit - unless you have installed solar shingles, tesla roof or something like that. Read more here: www.irs.gov/newsroom/energy-incentives-for-individuals-residential-property-updated-questions-and-answers
My solar system install has been completed in September. But I’m still waiting for the town installation and the PTO. Do I file this year or next year.
That's actually a very good question! The taxable year to claim and apply the tax credit is the year the "installation of the solar system is completed." Unfortunately, the IRS does not exactly clarify what 'being completed' means - does it mean 'installed' or 'put in service'?
My guess, and what most of my collegues in solar sales and PV installation believe, is that yes, you can claim ITC this year - it shouldn't be a problem. After all, the system is completed so it makes sense. I also suggest checking out this thread on Reddit - there are people discussing the same problem as you have: www.reddit.com/r/solar/comments/yo7g32/comment/ivdsugt/?context=3
This is the first time I have seen how the 5695 form is carried over to Schedule 3 and the actual 1040.
What type of documentation i need to have in order to probe that my system is operating if I installed myself and not a contractor?
What type of documentation i need to have to support the solar tax credit? thanks
was it an off-grid system? did you have to get permits to install it?
to claim ITC, you generally only need IRS Form 5695 and Schedule 3 (Form 1040) if it's a home system. but keep the receipts for all of your equipment as a support if the IRS decides to check.
@@a1solarstore not off-grid. i read that the system needs to be operational to claim the credit, what documents is required that is operational?
thanks for your comment!
Would I qualify for the federal tax credit if I pay a 3rd party (Plastiq) with a credit card and then Plastiq issued a check on my behalf to the solar company?
Note I am the owner of the panels.
I have been looking for this in English
I'm having more solar panels added to my roof by a different company.How do I add that dollar amount of 30% to my tax credit for this year?
Well, even if you have claimed Solar Tax Credit for panels already installed, it shouldn't get in the way of getting itc for new ones. "Earlier installations of qualifying property do not affect the availability of the credit for qualifying property in later years. - www.irs.gov/pub/irs-wd/201809003.pdf#page=4 So i'd say, treat these added panels and the labor to install them as a cost of a new system. It would be reasonable to subtract the parts that you have claimed itc for - like an inverter, if you're keeping the old one. oh, and ask your new contractor about it as well.
Are the solar companies supposed to send out the form 5695 or do I have to complete it myself?
You can find the form online. Solar companies will probably tell you about ITC but they usually don't take part in claiming it unless it's in a contract or unless it's a lease.
The loan was 46000 and I was told I was getting back 14000 but I only got 800 plus CPS 3000 what happens to the rest of the money and do I get all in one payment or have to wait for many years
I have the same question
can you please clarify 30 percent federal solar tax credit if its on the total value of net installation cost or minus Renewable Energy Credit ? For example if the installation cost without any incentive is 30 k and then you get energy credit 15K ... is 30 percent calculated on 30 k or 15k for federal tax credit ?
I'm not sure what renewable energy credit you're referring to. Renewable energy credits are something you earn while producing clean electricity but they don't lower the upfront costs (check here: en.wikipedia.org/wiki/Renewable_energy_credit), so they won't have an impact on the cost of installation.
Thevsolar company said we should get 8k and send to them.or monthly rates increased.
I have a customer that installed solar in 2023. Also in 2024 he installed a separate solar and battery, can he claim that system in 2025?
The second one? I don't see why not. Homeowners can claim the solar tax credit once per solar and/or battery system installed on an eligible property.
They got insulted dec 26 2023 . They were connect by city January 19 2024. When do I do claim
you mean 'installed'? Technically, your system was completed last year. If I were you, I would claim it this year. Check out this thread on Reddit - there are people discussing the same problem as you have: www.reddit.com/r/solar/comments/yo7g32/comment/ivdsugt/?context=3