Residential Energy Efficiency Tax Credit - Panel

[footballgames101]

Hello,

I've seen a list of the eligible improvements and equipment eligible for this credit. However, there is a line in the section under "Property placed in service after 12/31/2022" that mentions that "Any improvement to or replacement of a panelboard, sub-panelboard, branch circuits, or feeders which is installed in accordance with the National Electric Code, has a load capacity of not less than 200 amps, is installed in conjunction with any qualified energy efficiency improvement"

Does this in-conjunction qualified energy efficiency improvement have to be made during the same tax year to be eligible? So, I want a qualified Central Air Conditioner but it's determined that I need to upgrade my panel from 120 amp to 200 amps first. If I choose to do the panel upgrade in calendar year 2023 but then do the central airconditioner installation in 2024, can I still claim the panel-upgrade in my 2023 tax year, even if I haven't technically done the AC upgrade yet? Or do I have to do the panel upgrade AND the qualified AC improvement in the same tax year to claim the credit?

[JohnB5677]

Yes, you can take the credit for the panel in 2023, and for the air conditioner in 2024.  There are limits on the amounts that can be taken, and they carry from year to year.

Any improvement to, or replacement of, a panelboard, sub-panelboard, branch circuits, or feeders which:

1. is installed in a manner consistent with the National Electric Code,
2. has a load capacity of not less than 200 amps,
3. is installed in conjunction with, and enables the installation and use of:
   • any qualified energy efficiency improvements, or
   • any qualified energy property (heat pump water heater, heat pump, central air conditioner, water heater, furnace or hot water boiler, biomass stove or boiler)

Electric Panel Upgrade Tax Credit

[footballgames101]

Thanks  JohnB5677.

It's reassuring to know that "is installed in conjunction with, and enables the installation and use of" clause does not have to be done during the same tax year. I could not find that explained anywhere in my searching so thank you so much for letting me know, this will really help my 2023 and subsequently my 2024 budget plans.

[sarahs99]

Where in TurboTax does the electrical panel credit get entered for tax year 2023?  The residential energy credit area does not have a category for the electrical panel that I could find.  

[JohnW152]

Wait for a few days before proceeding.  The programming that reflects new legislation hasn't been updated yet. 

Form 5695, Residential Energy Credits, the form on which such costs can be claimed for tax year 2023, hasn't yet been finalized in TurboTax.  Once this is done, you’ll be able to complete the form using the updated computations.

The form is tentatively scheduled for use on February 7th, 2024.  You can check for any updates in TurboTax's Tax form availability app.  These expenses will be claimed on line 25a of Form 5695. 

Since the programming isn't updated yet, it isn't possible to tell you precisely where it will be entered. Generally, though, to enter home energy credit information in TurboTax Online:

1. Open TurboTax Online
2. Select Tax Home in the left pane
3. On the  Hi, let's keep working on your taxes! screen, select the dropdown on the right side of the Deductions & Credits box, then select Start, Continue, or Review/Edit
4. On the  Your tax breaks page, scroll down and select the dropdown to the right of Your Home
5. Select  Start or Revisit to the right of Home Energy Credits
6. On the  Energy-Saving Home Improvements page, select Yes in answer to the question, Did you make energy-saving improvements in 2023 or have a carryforward from 2022?
7. Enter all relevant information on the ensuing pages

@sarahs99 

[emma8956]

Perhaps I'm confused.  RE the statement - is installed in conjunction with, and enables the installation and use of:

Doesn't AND imply both conditions have to be true - that is "installed in conjuction with"?  Seems to imply that they have to be done at the same time. In other words - getting a new heat pump required me to upgrade my electrical panel to 200 A.  Therefore since done in conjunction, I can claim the credit.   

If they can be separate (panel is precursor for other work) would it not read "OR"?

[DaveF1006]

According to energystar.gov, electrical panels are eligible for energy credits if:

1. Installed in a manner consistent with the National Electric Code,
2. has a load capacity of not less than 200 amps,
3. is installed in conjunction with, and enables the installation and use of:
   • any qualified energy efficiency improvements, or
   • any qualified energy property (heat pump water heater, heat pump, central air conditioner, water heater, furnace or hot water boiler, biomass stove or boiler)

The interpretation of this may be vague but I would interpret this to mean that the installation of the heat pump and panel should be done at the same time or nearly the same time so that the heat pump and electrical panel are both shown on Form 5695. For an example, if the electrical panel is installed and claimed and if there are no other electrical improvements claimed, then the panel may not be claimed for a stand-alone credit even if it was installed as a precursor for future energy improvements. 

I don't know if this answers your question or not and let us know if we need to elaborate more.

@emma8956 

[emma8956]

Thanks for weighing in. After reading a bit more and studying the actual 5695 form the section B it seemed to confirm that it had to be done relatively at the same time (in conjuction with). Appreciate the follow up.

21 a Did you incur costs for qualified energy property installed on or in connection with a home located in
the United States?  . . . . . . . . . . . . . . . . . . . . . . . . . . 21a Yes No
b Was the qualified energy property originally placed into service by you? . . . . . . . . . . 21b Yes No
If you checked the “No” box for line 21a or 21b, you cannot claim the credit for your residential
energy property costs.