Can I get the solar and wind energy credit since my dad installed solar panels?

[benjamindearden]

I don't pay for them but turbotax says the credit is available to owners and tenants of residential property that has renewable energy installed and I live in his house

[ColeenD3 · Accepted solution]

Unfortunately, no, You would have had to pay for it.

 What improvements qualify for the residential energy property credit for homeowners?

A. In 2018, 2019 and 2020, an individual may claim a credit for (1) 10 percent of the cost of qualified energy efficiency improvements and (2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during the taxable year (subject to the overall credit limit of $500).

Energy Credits

[Opus 17]

No.  You can't claim the credit because you did not pay for the expense.

Your father can't claim the credit either, because he does not live in the home.

If you had paid for the installation costs, you could claim the credit even though you aren't the owner. 

https://www.irs.gov/pub/irs-drop/n-13-70.pdf

[benjamindearden]

He does live in the home so he is going to claim it. I was just wondering based on how turbotax said the credit applies to tenants and owners. Thanks for your reply though!

[Opus 17]

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@ColeenD3 wrote:

Unfortunately, no, You would have had to pay for it.

 What improvements qualify for the residential energy property credit for homeowners?

A. In 2018, 2019 and 2020, an individual may claim a credit for (1) 10 percent of the cost of qualified energy efficiency improvements and (2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during the taxable year (subject to the overall credit limit of $500).

Energy Credits

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That IRS page is terrible because it confuses the "Nonbusiness energy property credit" (generally, 10% for insulation, efficient doors and windows, and efficient furnaces and heat pumps) with the "Residential energy efficient property credit" (fuel pumps, geothermal, wind and solar).  

Under the "Residential energy efficient property credit", the taxpayer does not have to own the home to claim the solar credit, but I agree that they must actually pay the cost before they are allowed a credit for the cost.

[Opus 17]

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@benjamindearden wrote:

He does live in the home so he is going to claim it. I was just wondering based on how turbotax said the credit applies to tenants and owners. Thanks for your reply though!

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It's a little confusing because the section 25C credits for insulation, door and windows and so on, can only be used if the taxpayer owns the home and uses it as their main residence.  The section 25D credits, which includes the solar cost, only requires that the taxpayer who claims the credit live in the home as "a" residence -- it doesn't have to be their "main" residence and they don't have to own it.

However, the taxpayer who wants to claim the credit still has to have paid for the solar in the first place.  So you have to pay for it and live there, but it doesn't have to be your main residence and you don't have to be the owner.