form 5695 take 30% for 2020,Safe Harbor payment in 2019

[aergproperties]

I paid more than 5% of my Solar Electric PV installation in 2019 so that I could claim the 30% rebate when my system was completely installed in 2020.  How do I change the percentage listed on IRS Form 5695; Line 6 from 26% to 30% to address that and what documents do I need to include in filing?

[Cynthiad66]

A solar PV system must be installed before December 31, 2019, to claim a 30% credit. It will decrease to 26% for systems installed in 2020 and to 22% for systems installed in 2021. And the tax credit expires starting in 2022 unless Congress renews it. There is no maximum amount that can be claimed.

Now, the solar investment tax credit is available to homeowners in some form through 2021. Here are the specifics. 2016 – 2019: The tax credit remains at 30 percent of the cost of the system.  Owners of new residential and commercial solar can deduct 22 percent of the cost of the system from their taxes.

[aergproperties]

I am aware of the stepped down credit percentages.  I made partial payment in 2019 but the project was not completed until 2020.  My original questions still stands. How do I claim the 30% credit for a project started in 2019?

[JeffreyR77]

You can not claim the 30% credit for a project started in 2019.

According to the instructions from the Internal Revenue Service, "For purposes of both credits, costs are treated as being paid when the original installation of the item is completed...(2020 Instruction for Form 5695, Residential Energy Credits)". 

There is no provision for a project to start in one year and be completed in a future year and qualify for the higher credit from the earlier year. 

Tax credits are incentives by the government to incentivize activities in particular periods. The 30% credit was to incentivize installations for 2019.  To qualify, installations must have been completed in 2019.

Because your system wasn't completed until 2020, your credit is 26%.

[AmeliesUncle]

The Safe Harbor only applies to the business version of the credit.  It does not apply to the personal residential credit.