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March 15, 2024
Question

Solar tax credit on a second home

  • March 15, 2024
  • 1 reply
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Hi, I am a snowbird, 6 months in each area, with my primary home in NC.  In 2023 I installed solar panels on my secondary home in AZ. Can I receive a tax credit for the Solar on my Federal?  I assumed it would be somewhere on form 5695, but it looks like I can only claim this credit if the solar was installed on my primary home.  So 2 questions: 1) can I claim this credit on my federal and 2) where and how do I claim it.

Thank you

Jill

    1 reply

    DawnC
    Employee
    March 15, 2024

    It is also done on Form 5695.   It is only the fuel cell property portion that can only be claimed on one home.   The requirement for the solar property is that you use the property as a residence, which you do.   From the IRS:

     

    You may claim the residential clean energy credit (solar credit) for improvements to your main home, whether you own or rent it. Your main home is generally where you live most of the time. The credit applies to new or existing homes located in the United States.   You can't claim the credit if you're a landlord or other property owner who doesn't live in the home.

     

    You may be able to claim a credit for certain improvements made to a second home located in the United States that you live in part-time and don't rent to others.   You can't claim a credit for fuel cell property for a second home or for a home that is not located in the United States. Find more on qualifying residences.

     

    For the Residential Clean Energy Property Credit (solar credit), the following requirements apply:

     

    • solar water heating property expenditures, solar electric property expenditure, small wind energy property expenditures, geothermal heat pump property expenditures, and battery storage technology expenditures: the home must be located in the United States and used as a residence by the taxpayer (includes renters); and
    • fuel cell property expenditures: the home must be located in the United States and used as a principal residence by the taxpayer (includes renters).

     

    Solar panels convert sunlight into electricity using photovoltaic cells, while fuel cells generate electricity through a chemical reaction, often using hydrogen or another fuel. They are both renewable energy sources, but they are not the same thing.   

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