My solar panel installation will be in two phases, over two calendar years. Can I still claim the 30% tax credit again for the second phase in a subsequent return?

[kunchd]

This is on the same property. I want to ensure that I can claim the 30% credit again on the second phase, and that the TurboTax software will give me that option (instead of only allowing me to claim the FTC one time per property, even though this is an addition to my solar panel installation).

[robtm]

You can only claim the 30% tax credit ONCE, even though the installation is spread over 2 or more years.

[NCperson]

@kunchd you are permitted the 30% credit once the panels are operational.  

as stated in the link below, 

"The credit has no annual or lifetime dollar limit except for credit limits for fuel cell property. You can claim the annual credit every year that you install eligible property until the credit begins to phase out in 2033."

https://www.irs.gov/credits-deductions/residential-clean-energy-credit

so if phase 1 is operational this year, you can take the 30% credit on the cost of phase 1, and once phase 2 is installed and operational, you can take a 30% credit for that in another tax year.  Any unused credit can be rolled to the following year until consumed.  Line 22 of Form 1040 can't go below zero, which can cause "unused credit". 

[kunchd]

Thank you both for taking the time to respond.  As you can see though, you have given opposite answers and hence my confusion!  @robtm can you please provide a link to where you see that it can only be claimed once per property?  The other response from @NCperson links to an IRS page where it says you can claim for each time you install "eligible property," which I would assume additional new panels would be.  I am more partial to thinking you can claim each time you add new panels, unless there is some document that states this clearly that it is once only per each property (and you can't claim for additions).  Thanks very much.

[Opus 17]

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@kunchd wrote:

Thank you both for taking the time to respond.  As you can see though, you have given opposite answers and hence my confusion!  @robtm can you please provide a link to where you see that it can only be claimed once per property?  The other response from @NCperson links to an IRS page where it says you can claim for each time you install "eligible property," which I would assume additional new panels would be.  I am more partial to thinking you can claim each time you add new panels, unless there is some document that states this clearly that it is once only per each property (and you can't claim for additions).  Thanks very much.

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If you are installing ONE system, you claim the credit one time, when the system is placed in service (inspected, connected, and turned on) regardless of whether the work was spread out and regardless of how long it takes to pay for the system. 

If you are installing more than one complete system, you can claim a credit for the first system when it is placed in service, and you can claim a credit for the second system when it is placed in service.  

The key is "placed in service."  Are you installing two systems that will be placed in service at different times, or one system that will be placed in service at the end of both phases of installation?

[kunchd]

Thank you @Opus 17 for responding and asking the follow-up questions.  Here are more details:

I will need to install a total of 50 solar panels on my home in Massachusetts.  The net metering cap in Mass was legislatively increased last year, but the utilities are waiting for new regs and so the present cap of 34 panels is still in place.  My solar company advised me to install the first batch of 30 panels this year, and to install the other 20 next year after the new regs are released (and I can be assured to fall within the net metering cap without relying on grandfathering).

This is one system for my house, and I have installed and am operating the first 30 panels.  I will likely install the other 20 panels on this present system next year after the regulations are updated.

I had planned on claiming the 30% credit each tax year (30 panels for this year and then 20 panels for next year), but worried that I could only claim once per system.  This didn't make sense to me though because if someone wanted to add more panels to an operating system (e.g., because they later bought an EV), I would imagine they would get the 30% credit on the incremental new panels as well.

I suppose I could also wait until after 50 panels are installed and then claim the FTC for that year (which would be next year), but I also thought you had to file the credit in the year in which you first installed (as opposed to finished) the system.

I also suppose I could treat the 30 panels as one system and the 20 panels as another system, and that would also allow me to file the FTC for each system when installed.  I know the solar company will have to do another round of permitting and likely another Permission to Operate (PTO) for the second 20 panels as well (that would then get up to my total of 50 panels, with two different PTOs for 30 and then another 20 panels).

Thank you again for taking the time to try and help me get my head around this.