Bought the house 17 years ago with an old house solar water heater system. Have now replaced the entire system with new tank, pump and collector panels (Sun Earth brand panels). Does this replacement system qualify for the energy tax credit?
Yes, the residential energy efficient property credit equals 30% of what you spend on qualifying property such as solar electric systems, solar hot water heaters, geothermal heat pumps, wind turbines, and fuel cell property.
- Generally, labor costs are included when calculating this credit.
- Not all energy-efficient improvements qualify for these tax credits. For that reason, you should check the manufacturer's tax credit certification statement before purchasing or installing any of these improvements. The certification statement can usually be found on the manufacturer's website or with the product packaging.
- The IRS cautions that the manufacturer's certification is different from the Department of Energy's Energy Star label, and not all Energy Star labeled products qualify for the tax credits.
- Keep in mind, these are not refundable credits, which means you can take the credit up to the tax owed. There is no refund of any credit amount left over.
- Further information on this credit can be obtained in IRS Form 5695, Residential Energy Credits.
If you are eligible for the Residential Energy Efficient Property Credit, you may enter it here:
- Click the Federal Taxes tab
(or Personal if using Home & Business)
- Then, Deductions & Credits
- In the
"Your Home" section, next to "Home Energy Credits",
click Start or Revisit/Update
Or click Show more to expand menu options
- Answer Yes to "Did you make energy-saving improvements in 2015 or have a carryforward from 2014?" then follow the prompts from there.
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