topic What Federal and NY State Solar Tax Credits are available to a rental property held by a multi-member LLC? in Deductions & credits

What Federal and NY State Solar Tax Credits are available to a rental property held by a multi-member LLC?

smlucio — Wed, 11 Feb 2026 03:58:43 GMT

Hi,

My partner and I are the members of an LLC that holds a vacation rental property in New York state. We are looking into getting solar panels for the property and are navigating the confusing world of federal and state tax credits. Although this property is occasionally used as a residence for myself and my partner, who is also my brother, we only stay there for about 2-4 weeks a year. The rest of the time, it is rented out on Airbnb as a short term/vacation rental.

We would like to purchase the solar panels, not lease them. What tax credits are available to us? The Federal Tax Credit for Residential Solar seems to limit the amount we can claim up to the time we actually reside in the house. So that doesn't work as we don't really live there. Any insights would be helpful.

Thank you!

Re: What Federal and NY State Solar Tax Credits are available to a rental property held by a mult...

AmyC — Fri, 09 Feb 2024 18:32:41 GMT

NY allows a business to claim solar credit. See New York State’s energy-related programs which includes the one for you, Solar Program (NY-Sun)

Since the LLC partnership owns the property, the federal seems out of reach. If you were an individual using the home part time, you could qualify for a percentage. See Q3 at Frequently asked questions about energy efficient home

Re: What Federal and NY State Solar Tax Credits are available to a rental property held by a mult...

smlucio — Fri, 09 Feb 2024 19:38:08 GMT

Thank you for your input @AmyC .

Question: Isn't there a federal tax credit for businesses? I believe it's referenced as ITC. Would a rental property owned by an LLC be a business that would qualify for ITC?

Re: What Federal and NY State Solar Tax Credits are available to a rental property held by a mult...

AmyC — Fri, 09 Feb 2024 19:43:14 GMT

Homebuilders can qualify for the ITC but not landlords. Take a look at Federal Solar Tax Credits for Businesses since your partnership may qualify that way.

Re: What Federal and NY State Solar Tax Credits are available to a rental property held by a mult...

smlucio — Fri, 09 Feb 2024 20:40:09 GMT

This is so confusing to navigate as you find so much conflicting information.

One site states rental properties may also qualify under Section 48 as a business tax credit, but another says a rental property is eligible for business ITC under Section 48 but it must be used as a residence of the taxpayer, which a real rental property/business isn't used as a residence of the taxpayer.

Then the energy.gov website @AmyC suggested I go to only states this in terms of requirements to qualify:

To be eligible for the business ITC or PTC, the solar system must be:

Located in the United States or U.S. territories[6]
Use new and limited previously used equipment[7]
Not leased to a tax-exempt entity (e.g., a school), though tax exempt entities are eligible to receive the ITC themselves in the form of a direct payment.[8]

Our rental property meets these requirements. I've tried just calling the IRS to get specific information, but you can imagine where that gets you. Nowhere.