The eligibility requirements for the federal investment tax credit (ITC) for energy storage in a second home depend on the specific type of tax credit you are referring to. Here are some key considerations based on different tax credits:
Residential Clean Energy Credit
- Eligible Homes: The residential clean energy credit under Section 25D can be claimed for principal residences and second homes used as residences by the taxpayer. Rentals do not qualify.
- Eligible Systems: For residential uses, battery storage technology with a capacity of at least 3 kilowatt-hours is eligible for the credit.
- Tax Form: Claim the credit using Form 5695.
Investment Tax Credit (ITC) for Energy Storage (Commercial/Non-Residential)
- Eligibility for Second Homes: While the residential clean energy credit can apply to second homes, the commercial/industrial ITC typically applies to businesses or projects rather than individual second homes. However, if the second home is used significantly for business purposes, it might be considered under certain conditions.
- Standalone Energy Storage: For standalone energy storage projects (not paired with solar), the Inflation Reduction Act introduced a tax credit. These projects can be eligible if they meet certain requirements, such as having a minimum capacity of 5 kWh, and are placed in service after December 31, 2022.
- Tax Form: Use Form 3468 for claiming investment tax credits, including those related to energy storage projects.
In summary, if the energy storage in a second home is for residential use, the residential clean energy credit applies. If considering commercial applications or significant business use, the ITC might be applicable, but typically it is for non-residential projects. Always consult a tax professional for personalized advice.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-eligibility-requirements-for-the-federal-investment-tax-credit-for-energy-storage-in-a-second-home/
