Energy Storage Credit for solar batteries 60%, is this an error in TT Form5695 calculations?

[lbiaggi]

As I was going through the step-step, it asked if I had any installed battery technology which I did and also indicated it was installed at home.  I always have read that the credit was 30%, but to my surprise upon reviewing Form 5695 2023 generated, I see 30% applied twice, ie a total of 60% credit?

 To be more specific, I answered to 5a Yes, then entered the amount in 5b $12000,  then follow the instructions,  line 6b (12000 x .30=$3600).

Then in line 8 it said qualified fuel cell property, I entered $12000, line 9 (12000x.3=3600), then line 10 (10kwx1000=10000, entered the smaller $3600 in line 11, then finally, then line 13 asked me to add line 6b and 11 = $7200 

[MarilynG1]

You get a credit for the solar panel installation, and also for the solar storage battery, so yes, you can end up with two credits if you installed both of these.

Was your solar install and your battery each 12K?  Or was that the total of them both?  If so, separate the costs of each portion.

Here's more info on the Residential Clean Energy Credit and also from TurboTax on Form 5695. 

[lbiaggi]

Thanks for your quick reply.  In 2022 I installed the panels and with it 2 5kW batteries.  This one I included in the 2022 and got 30% credit.  

In 2023, I added another battery 14kW, which is the only cost I am including in the 2023 year tax. All batteries meet the main home use and also charged by solar only (not grid).

Researching through google more, it looks like in 2022 and 2023 Residential Clean Energy Credit (30%) applies, but then there is the Inflation Reduction Act which applies from 2023 and on (30%)?

[RobertB4444]

You can't use the same property to qualify for two credits.  The residential clean energy credit is the one you want to use for this one.  

@lbiaggi 

[lbiaggi]

Thanks Robert.  I missed that  You can't use the same property to qualify for two credits in Form5695?  It comes down to the definitions in the instructions  for  "battery storage technology " and  "fuel cell property".  Doing some more digging into these definitions.

[lbiaggi]

The confusion as one goes through TTax step by step/help/more and the IRS instructions is on the definitions of "battery storage" and "fuel cell". TTax and IRS fail to add the definition of fuel cell and the fact that batteries and fuel cells work very similar.  Battery storage is self explanatory.  For fuel cell, Form 5695 Instruction   states " Qualified fuel cell property is an integrated system comprised of a fuel cell stack assembly and associated balance of plant components that converts a fuel into electricity using electrochemical means".  Unfortunately there is no further definitions for "fuel cell", so I looked for the definition: "a device that generates electricity through an electrochemical reaction, not combustion."  So a battery fits this definition, it does not use combustion, and works based on an electrochemical reaction (has a positive and negative pole AND a chemical between these, and it has a kW label).  A battery fits BOTH definitions of battery and fuel cell.  

One could argue the above with the IRS, but I kept looking for details details details, and found my answer at the Office of ENERGY EFFICIENCY & RENEWABLE ENERGY which I would recommend be added to TTAX at least under help or more.  "Note: To qualify as a fuel cell, the cell does not run down or need recharging".