Eligibility Criteria
- Minimum Capacity: The battery storage technology must have a capacity of at least 3 kilowatt-hours. This requirement becomes relevant starting from 2023, but most installations are larger, typically around 10 kilowatt-hours or more.
- Usage and Location: The system must be installed in a dwelling unit located in the United States and used as a residence by the taxpayer. This can include principal residences, second homes, houses, houseboats, mobile homes, cooperative apartments, condominiums, and manufactured homes.
- Taxpayer Residency: The taxpayer must live in the property at least part of the year. However, it does not need to be the taxpayer’s principal residence.
- Exclusions: Rental properties do not qualify unless the landlord uses the property as a residence themselves. In such cases, renters are not eligible unless they own the property and reside there.
- Installation Period: To qualify for the 30% tax credit, the battery storage must be installed and placed in service after December 31, 2021, and before January 1, 2033.
- Eligible Costs: Labor costs associated with installation are also eligible for the tax credit, including onsite preparation, assembly, or installation. Additionally, costs for piping and wiring necessary to connect the battery storage to the home can be included.
- Form for Claiming Credit: To claim the tax credit, taxpayers must use IRS Form 5695.
Additional Notes
- The tax credit is not limited by the size or cost of the system beyond the 3 kilowatt-hour capacity requirement.
- The Inflation Reduction Act (IRA) amended the tax credit schedule, maintaining a 30% credit for eligible installations through December 31, 2032, and then reducing it to 26% from January 1, 2033, to December 31, 2033.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-eligibility-criteria-for-the-tax-credit-on-battery-storage-technology/
