To report costs for battery storage on Form 5695, you should focus on the following key elements:
Required Information for Battery Storage on Form 5695
- Eligibility: Ensure that the battery storage technology has a capacity of at least 3 kilowatt-hours. This is a requirement for it to qualify for the Residential Clean Energy Credit.
- Installation Date: The battery storage system must have been placed in service after December 31, 2022, to qualify for the credit.
- Credit Percentage: If the system was placed in service after December 31, 2022, and before January 1, 2033, you are eligible for a 30% credit on the qualified costs.
- Qualified Costs: Only costs directly associated with the purchase and installation of the battery storage system qualify. This includes hardware and labor costs.
- Documentation: Keep detailed records of the costs incurred, including receipts and invoices from the installation company. These documents will support your claim on Form 5695.
- Claiming the Credit: On Form 5695, report the total qualified costs and calculate the applicable credit percentage based on the installation date. The instructions provided with the form will guide you through the calculation.
- Filing Requirements: Ensure all relevant sections of Form 5695 are completed correctly, as the form differentiates between various types of energy property and efficiency improvements.
By carefully reviewing and adhering to these guidelines, you can accurately report your battery storage costs on Form 5695 and claim the applicable tax credit.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-are-the-specific-costs-i-need-to-report-for-battery-storage-on-form-5695/
