Residential Energy Property Credit

You can claim the residential energy property credit if you made energy-saving improvements to your main home located in the United States that were not part of its original construction.

You cannot claim the credit if you are a landlord or other property owner who does not live in the home.

The credit is nonrefundable, which means the credit amount you receive cannot exceed the amount you owe in tax. You can carry forward any excess unused credit, though, and apply it to reduce the tax you owe in future years. Do not include interest paid, including loan origination fees.

Here are some examples of qualified properties:

• solar electric property
• solar water heaters
• geothermal heat pumps
• small wind turbines
• fuel cell property (this is limited to $500 per each half kilowatt of capacity of the qualified fuel cell property)
• the alternative energy equipment terminates for property placed in service after 12/31/2021

Used (previously owned) clean energy property is not eligible.

Here are the percentages for properties placed in service:

• December 31, 2016, and before January 1, 2020 – 30%
• After December 31, 2019, and before January 1, 2021 – 26%
• After December 31, 2020, and before January 1, 2022 – 22%
• January 1, 2022 – December 31, 2032 – 30%
• January 1, 2033 – December 31, 2033 – 26%
• Janurary 1, 2034 – December 31, 2034 – 22%

Roofing

Traditional roofing, which is used as a structure for a home does, not qualify for this credit. However, solar roofing tiles or shingles count – which assists in energy preserving functions while being a structural component – may qualify.

Click here for more information about qualifications and how to claim the credit.

This entry was posted on Friday, November 20th, 2020 at 3:02 pm and is filed under Credits. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.