To claim the federal tax credit for battery storage, follow these steps:
Steps to Claim the Tax Credit
- Check Eligibility: Ensure the battery storage system is installed in a U.S. residence, either as a primary home or a second home not used as a rental property. The system must have a capacity of at least 3 kilowatt hours.
- Purchase and Install: Buy and install the qualified battery storage technology. This can be part of a solar energy system or a standalone installation.
- Gather Documentation: Keep receipts and installation records. Although not required to be filed with your tax return, these documents may be needed in case of an audit.
- Claim the Credit: File IRS Form 5695, Residential Energy Credits, with your tax return for the year the battery storage was installed. The credit is currently 30% of the installation costs for systems placed in service between 2022 and 2032.
- Consider Subsidies and Rebates: When calculating your credit, subtract any subsidies or rebates related to the purchase price, as these can reduce your qualified expenses.
Additional Information
- The tax credit can be claimed without a maximum limit in dollars per year until the phase-out begins in 2033, reducing to 26%, and then to 22% in 2034.
- The credit is non-refundable, meaning it cannot exceed the amount you owe in taxes, but any excess can be carried forward to future tax years.
Consult with a tax advisor for personalized advice on your specific situation.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-i-claim-the-federal-tax-credit-for-battery-storage/
