residential energy credit

[jandeefujimoto]

if there are two (not spouses) residents of home, can they each pay half cost of solar panel installation and claim the amount they have paid on their individual tax returns?

[Opus 17]

Yes.

[jandeefujimoto]

Thanks.  Looking at turbotax directly I see a question regarding joint "ownership" of property.  It is my understanding that you need to be a resident of the property, but not necessarily an owner, in order to qualify for residential clean energy credit.  Turbotax seems to have installed only one Q&A easy step for both energy efficient and residential clean energy credits yet does not provide an option for sharing residence without ownership with regards solar.  Can I say "yes" to the "do you share ownership" question in easy step, or is there a different section of turbotax that I should be using?

[Opus 17]

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@jandeefujimoto wrote:

Thanks.  Looking at turbotax directly I see a question regarding joint "ownership" of property.  It is my understanding that you need to be a resident of the property, but not necessarily an owner, in order to qualify for residential clean energy credit.  Turbotax seems to have installed only one Q&A easy step for both energy efficient and residential clean energy credits yet does not provide an option for sharing residence without ownership with regards solar.  Can I say "yes" to the "do you share ownership" question in easy step, or is there a different section of turbotax that I should be using?

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There are some energy efficient credits where you must use the home as a residence (you don't have to own or use it as your main residence).  There are other credits where you must use the home as your main home, and some credits you must be an owner.  Without looking over all of IRS section 25C and 25D, I can't list them out for you, but the solar panel credit is one where you only have to use the home as a residence.  You don't have to own it or use it as your main residence.

Turbotax has not updated the energy efficiency credits for 2024 yet, the estimated date is January 17.  Check back then.  If you still aren't sure, ask here.

However, there are other significant legal risks to installing solar panels on a home you don't own.  In most states, when an improvement is permanently installed on a piece of real estate (real property), the owner of the real property becomes the immediate owner in full of whatever is installed, no matter who pays for it.   If you pay for solar panels on a property you don't own, and you have a falling out with the owner, you may never recoup the cost.

[jandeefujimoto]

Very much appreciated.  You have really helped.

[jandeefujimoto]

You've been so great so far.  A couple more questions regarding the exact same topic.  For the sake of documentation in case of an audit, does it matter whose name(s) are listed on the contract with the solar company and does it matter who actually "signs the check" (makes the payment)?

[Opus 17]

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@jandeefujimoto wrote:

You've been so great so far.  A couple more questions regarding the exact same topic.  For the sake of documentation in case of an audit, does it matter whose name(s) are listed on the contract with the solar company and does it matter who actually "signs the check" (makes the payment)?

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All I can really say is that, in case of audit, the IRS does not have to allow any credit or deduction that the taxpayer can't prove with sufficient reliable records.  What that might be depends on your situation, make the best effort you can to document the situation.

[FEK88]

>> There are some energy efficient credits where you must use the home as a residence (you don't have to own or use it as your main residence). 

But, Turbotax was just updated to prohibit taking this credit unless you state it WAS your MAIN RESIDENCE.  If it must only be "A residence", not your main residence, they why was this update made to require that it be your MAIN residence?

[AmeliesUncle]

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@FEK88 wrote:

But, Turbotax was just updated to prohibit taking this credit unless you state it WAS your MAIN RESIDENCE.  If it must only be "A residence", not your main residence, they why was this update made to require that it be your MAIN residence?

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Are you SURE it is asking that specifically for Solar? 

There are some energy credits that are only available for your main residence.  But the solar can be on any residence.

[FEK88]

Energy-Saving Home Improvements screen (lists Solar electric costs) - YES

First, We Need to Know a Little About Your Living Arrangements

    Yes, we lived together in the same home.

Energy-Saving Improvement for your Home

    Yes, our home is in the U.S.

        No, the improvements weren't made to our main home. 

Do you Have a 2022 Home Energy Credit to Carryforward?

    No, I did not.

Your Home Energy Credit Summary

    Based on what you've entered so far, we can't get you the home energy credit for 2023 and you have no credit to carry forward to 2024.

Your Home Energy Credit - $0

    Cash in Pocket - That's a good thing.

What gives?

If I backup and change the answer to "Yes, the improvements were made to our main home"?

THEN, it will allow me to claim the Solar Energy Credit.

FWIW - this CHANGED when I got a Turbotax update. It worked fine last week.

[Opus 17]

@FEK88 

then answer yes to get the credit.  I will flag this for review. 

[Cynthiad66]

Some TurboTax customers are experiencing an issue with their Home Energy improvements not qualifying for the Home Energy Credits when they’re made to a second home or not made to their ‘Main Home,’ even when some of the home improvements should qualify.

We’re currently working to resolve this issue. If you’d like to receive progress updates, sign up below.

Sign In Here For Notifications

@FEK88