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February 23, 2023
Question

Hello, I am trying to find out how to add my new solar system on my rental deductions. I am renting my basement...can I deduct solar?

  • February 23, 2023
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February 23, 2023

Yes.  You can't claim the Residential Clean Energy solar tax credit for installing solar power at rental properties you own unless you also live in the house for part of the year and use it as a rental when you're away.  It's your personal residence, so you can claim the deduction.

 

You can enter them like this:

  1. Open or continue your return, if you don't already have it open
  2. In TurboTax, search for energy improvements (Don't search for energy credit as this will take you to the wrong place)
  3. Select the Jump to link in the search results
  4. On the Energy-Saving Home Improvements screen, answer Yes and Continue. Follow the instructions on the next screens
    • The first part of the interview covers improvements like doors, windows, furnace, air conditioning, and heat pumps. If you're looking for other improvements like solar, geothermal, wind, and fuel cell, just keep going—we'll ask you about these soon

TurboTax Help FAQ: Where do I enter qualified energy-saving improvements?

 

The Residential Clean Energy (RCE) Credit is a renewable energy tax credit extended and expanded by the 2022 Inflation Reduction Act. The credit is worth 30% of certain qualified expenses for residential clean energy property. The Inflation Reduction Act extended and modified the existing energy credit through 2034, modified the applicable credit percentage rates, and added battery storage technology as an eligible expenditure.

 

The credit applies for property placed in service after December 31, 2021, and before January 1, 2033. Starting in 2033, the credit percentage rate phases down to 26% for 2033, then to 22% for 2034, and finally to no credit being available after December 31, 2034.

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