I was told that American Made solar panels get an extra 10% tax credit. If this is true, how do you reflect that on the forms?

[SabrinaD2]

Yes, American-made solar panels may qualify for an extra 10% credit under the Inflation Reduction Act if they meet domestic content requirements. You can claim this bonus on Form 5695 by including it in the total credit and attaching the necessary documentation if needed.

To add this form in TurboTax, follow these steps:

1. Log in to TurboTax and continue your return - be sure you are logged in for the link to work.
2. Navigate to the residential energy credit section by clicking this link: residential energy credit.
3. Continue through and complete the form for Form 5695 to be added.

Additional resources can be found by clicking What are Energy Tax Credits.

[scottj_1230]

Sabrina,

Thank you for the reply. I have completed form 5695, but I do not see any line item that asks about the manufacturer to indicate American made products and apply an additional 10%. What is the line item on that form to do so?

Thank you

[AmyC]

Things are different for a business vs an individual. 

Individual: An additional bonus is not available. Instructions for Form 5695 and Federal Tax Credits for Energy Efficiency

Tax credits for solar panels made in the U.S. 

• Production Tax Credit (PTC)
• Investment Tax Credit (ITC): A 30% credit for solar panels 
• Domestic content bonus credit: An extra 10% credit for solar panels that use American-made cells 

[sundansx]

AmyC,

Your links did not included any info about the:
Domestic content bonus credit: An extra 10% credit for solar panels that use American-made cells

Are you saying that homeowners cannot take thsi credit? If not, can the solar system installer take this credit and pass it onto the homeowner?

Thanks,

ck

[Vanessa A]

This Domestic content bonus credit is for the manufacturer not homeowners. The solar installer cannot take this credit either. 

The domestic content bonus credit is available to taxpayers that certify their qualified facility, energy project or energy storage technology was built with certain percentages of steel, iron or manufactured products that were mined, produced or manufactured in the United States.

[sundansx]

why would a panel manufacturer have an "energy project"?  That language makes no sense.

For that matter if it was broken down to this:
"The domestic content bonus credit is available to taxpayers that certify their qualified <energy project > was built with <manufactured products> that were <manufactured >in the United States."

This language would suggest taxpayers could take this credit.

[Vanessa A]

If you look at the link I posted, you will see that in order to claim this credit you must fill out form 8835 or form 3468. The forms are for production and investment. Homeowners cannot use these forms.  There is not a spot on form 1040 for these forms. They flow to form 3800 which is a general business credit form. 

Use Form 8835 to claim the renewable electricity production credit. The credit is allowed only for the sale of electricity produced in the United States or U.S. territories from qualified energy resources at a qualified facility. 

Use form 3468 to claim the investment credit. The investment credit consists of the following credits:

• rehabilitation,
• energy,
• qualifying advanced coal project,
• qualifying gasification project, and
• qualifying advanced energy project.

[sundansx]

I see that now. Thanks for clearing this up.