Claiming the Residential Clean Energy Credit for a second home involves specific eligibility criteria and procedural steps. Here’s how you can do it:
Eligibility Criteria
- Location: The second home must be located in the United States.
- Use: You must live in the second home part-time and not rent it to others.
- Exclusions: You cannot claim the credit for fuel cell property on a second home.
Qualifying Expenses
- Eligible Property: Qualifying expenses include solar panels, solar water heaters, small wind energy turbines, geothermal heat pumps, and battery storage technology.
- No Business Use: The property cannot be used solely for business purposes. If it is, the credit is not available. However, if business use is 20% or less, you can claim the full credit.
Claiming the Credit
- Form 5695: File Form 5695, Residential Energy Credits, with your tax return to claim the credit.
- Installation Year: The credit must be claimed for the tax year when the property is installed, not just purchased.
- Credit Percentage: The credit is 30% of the costs of new qualified clean energy property installed from 2022 through 2032.
- Limitations: The credit is nonrefundable, and any unused portion can be carried forward to future tax years.
Documentation
- Records: Keep records to support your credit claim, such as receipts for the energy-efficient equipment installed.
Additional Requirements
- PIN Reporting: For certain properties placed in service after January 1, 2025, a Product Identification Number (PIN) may be required to claim the credit.
Ensure you check the latest IRS guidelines and consult with a tax professional if needed, as tax laws can change.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/how-do-i-claim-the-residential-clean-energy-credit-for-a-second-home/
