No. You would use the total amount that you paid for the solar panels and installation on the contract. The interest is not deductible. Because you signed a contract for the payments it is the same as if you actually paid for the entire thing. You will get a 30% credit for the total purchase price. If you do not have enough of a tax liability this year to use the entire credit, you can carry the credit forward for additional years until the credit expires.
The Residential Energy Credit is also a non-refundable credit, however this one can be carried forward to future tax years until this credit goes away which is currently set to happen in 2034
This credit is worth up to 30% of the cost of the equipment, with no maximum limit. The items that fall into this category are as follows:
- Geothermal Heat Pumps
- Small Wind Turbines
- Solar Energy Systems
- Fuel Cells
- Battery Storage Technology
To enter these credits into TurboTax take the following steps:
- Federal
- Deductions and Credits
- I'll Choose what I work on
- Home Energy Credits which is under the "Your Home" category
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