Tax credit for storage battery

[taniuchi]

Regarding the 30% tax credit for purchase/installation of storage batteries for solar panels in 2023, can it be used only to offset federal taxes owed, or will it be paid as tax refund?

Thank you.

[Esther M]

Hi Taniuchi,

The credit has always been a non-refundable credit and will remain so under the new Inflation Reduction Act 2022 (IRA-2022 ) but now increased to 30%. Any un-used amount may be carried forward to the following years. As of now there's no indication under the new IRA-2022 that it will be refundable. 

[Anonymous · Accepted solution]

Hello taniuchi,

Thank you for participating in this Ask the Experts event. As to your question, all energy credits are nonrefundable, meaning they only offset any tax liability and are not refunded to you. However, if you already had taxes withheld or paid estimated taxes, you will get a refund of those payments in excess of the liability after the credit is applied. Also, if you are unable to use the full credit in the year you are eligible to claim it, you are able to carry it forward to future years.

I hope that helps.