Tax credit for panel upgrade

[swarnim777]

Hello, 

I am planning to get my electrical panel upgraded from 100 amps to 200 amps. Its costing me $4000. I have two questions- 

1. If I only get the panel upgraded in accordance with the safety codes etc, does that make me eligible for any type of tax credit without getting any other work done like solar etc.?

[IF YES] Where can I enter it in the turbotax platform and how much federal and state (CA) tax credit do I get? 

[IF NO]  Then I suppose I will have to pair it with any other improvements like solar or EV charging. In that case, can I get the panel upgraded now and solar done later this year or next year?

Do they also have to be with the same contractor in one invoice or can I have two separate invoices?

[DawnC]

Unfortunately, no credit available on its own.   You can have multiple invoices.  

Solar Expenses 

[swarnim777]

Appreciate the answer and link. However, I would be thankful if you take a look at the full question. Let me write it again- 

For only the panel, I see that EnergyStar shares the following which is contradictory to what you mentioned. 

https://www.energystar.gov/about/federal_tax_credits/electric_panel_upgrade

If the above is not applicable, then I suppose I will have to pair it with any other improvements like solar or EV charging. In that case, can I get the panel upgraded now and solar done later this year or next year?

Do they also have to be with the same contractor in one invoice or can I have two separate invoices?

[DawnC]

Yes, you're right, the panel is eligible for the Residential Clean Energy Credit.  Where do I enter the credit in TurboTax?    

Under the Inflation Reduction Act of 2022, federal income tax credits for energy efficiency home improvements will be available through 2032. A broad selection of ENERGY STAR certified equipment is eligible for the tax credits.  Under the Residential Clean Energy Credit, you can get a federal tax credit for installing alternative energy equipment such as:

• Solar electric property
• Solar water heaters
• Geothermal heat pumps
• Small wind turbines
• Fuel cell property

[swarnim777]

@DawnC  You still haven't answered my question that I have asked in last two replies. I am not looking for templated responses. My question is- 

If I want to get 30% tax credit, can I get the panel upgraded now and solar done later this year or next year?

Do they also have to be with the same contractor in one invoice or can I have two separate invoices?

[RobertB4444]

The credit for the electric panel maxes out at $600 or 30%.  So, in your case, $600.  

You can pair it with any number of other energy improvements including EV charging and solar.  They definitely don't need to be on the same receipt.  

All of the improvements or additions are credited in the year that they are done so if you do all of them in 2024 they would all go on the 2024 tax return.  

They are also all non-refundable credits which is to say they reduce your tax bill but can't be added to your refund if you don't use them all.  So they roll over into the next year.

@swarnim777 

[swarnim777]

Thank you so much @RobertB4444 This definitely adds a lot of clarity. 

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@RobertB4444 wrote:

The credit for the electric panel maxes out at $600 or 30%.  So, in your case, $600.  

You can pair it with any number of other energy improvements including EV charging and solar.  They definitely don't need to be on the same receipt.  

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On your response above, I understand I get only $600 rebate for just panel upgrade. 

However, if I do panel upgrade now, and get solar installed later this year, does that mean I still get $600 off on panel or will I now be eligible for 30% tax credit on ($4000 for panel upgrade and rest for solar)?

[DawnC]

If you paid for and installed the panel in 2023, you can take the $600 credit on this tax return.   Say you install a solar system later, you can take the 30% solar credit for the system.   If you take the residential credit now, you can't include that cost again when you take the solar credit.   But all the other cost can still be claimed when installed -  Solar Credit

You cannot claim the solar credit if you bought, but didn’t install, the solar system. It must be placed in service during the year, meaning they must be installed and producing electricity.

 

[swarnim777]

Thanks @DawnC and @RobertB4444 

What if I get panel upgrade done now in 2024 and solar installation in December of 2024. Would I then be eligible for 30% tax rebate on the combined bill?

[RobertB4444]

They are separate credits.  The panel is a $600 credit for you.  That's the max.  The solar is a 30% credit based on the cost.  Both are non-refundable.

@swarnim777 

[paul1701]

I cannot address CA state question but can tell you about Federal form 5695.  If you are doing panelboard upgrade in 2024 then you cannot take credit in your 2023 filing.  I am not a professional auditor or accountant, just informing you of what I have figured out. Electric panelboard upgrade  (to minimum of 200A) costs can be entered on line 25A of form 5695.  I went to the form as I did not initially see it in the dialog.  But Turbotax  software is  always updating so it may be more apparent now on the dialog for energy credit. Credit for panelboard upgrade max's out at $600 but put  your  full cost on line 25A. I did panelboard upgrade in 2023 and heat pump install in 2024. I will take energy credit for latter  in next year filing.