HelenaC
New Member

After you file

In general, consumer loan interest (personal loan) is not tax deductible

Did you get a home equity loan to pay for the solar panels? If so, yes. The interest is deductible. 

  • Only if the loan is secured by your home (such as home equity or other mortgage) the interest would be deductible as a home mortgage interest. 
  • Some lenders, when offering a mortgage loan, include a range of home improvements in the loan, such as solar panel systems.  Since the mortage is secured debt (by your home) the interest would be tax deductible.


Per Tax Topics - Topic 505 Interest Expense - IRS.gov

Types of interest deductible as itemized deductions on Form 1040, Schedule A (PDF), Itemized Deductions, include:

  • Investment interest (limited to your net investment income) and
  • Qualified mortgage interest including points (if you're the buyer); see below.

Types of interest not deductible include personal interest, such as:

  • Interest paid on a loan to purchase a car for personal use.
  • Credit card and installment interest incurred for personal expenses.
  • Points (if you're a seller), service charges, credit investigation fees, and interest relating to tax-exempt income, such as interest to purchase or carry tax-exempt securities.