If I own a duplex and live in 67% of the space (and rent out the rest), can I get the residential solar power deduction for the portion of the house that I live in?

Forum|Forum|3 years ago
July 13, 2022
3 replies
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We own our home, which is a 2-flat. For all accounting purposes, we rent out 33% of the building as a rental property. We are interested in installing solar panels this year and getting the 26% rebate, but I've found that it doesn't apply to rental properties. Am I correct in assuming that I can claim a portion of the panels?
i.e. If I pay 10k for panes, only $6,667 apply to my residence. 26% of that amount would come out to a $1733.42 refund off of our 2022 taxes. Is this accurate?

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Carl11_2

Employee

Yes.

AmeliesUncle

@laraseantax wrote:
but I've found that it doesn't apply to rental properties.

That is incorrect. You can also claim a solar credit on the rental portion, but that credit for the rental portion is entered on a different form (the Investment Tax Credit on Form 3468)

NCPERSON1

@laraseantax - I agree with the 'yes', but there is a 'but'.

The solar credits are 'non-refundable credits'. What that means is the solar credit reduces the tax liability on Line 18 of Form 1040. That liabiltiy can not go below zero (see Line 22).

So as long as the solar credit is less than your tax liaiblity (line 18), then the response of 'yes' to your hypothetical numbers is correct.

BUT

if the solar credit is GREATER than your tax liability, you must carry over the remainder to a future year.

(Form 3468 also results in a non-refundable credit)