To qualify for the federal tax credit on battery storage, you need to follow these steps:
Eligibility Criteria
- Capacity Requirement: The battery storage system must have a capacity of not less than 3 kilowatt hours.
- Installation Location: The system must be installed in connection with a dwelling unit located in the United States and used as a residence by the taxpayer.
- Installation Timing: For the current 30% tax credit, the system must be installed after December 31, 2021, and before January 1, 2033.
Installation Steps
- Choose a Qualified System:
- Ensure the battery storage system meets the capacity requirement. It can be installed with or without solar panels.
- Discuss with contractors to select technology that can qualify for the tax credit.
- Complete the Installation:
- Ensure that the system is properly assembled and installed at your home.
- Document Expenses:
- Save all receipts, invoices, and documents related to the purchase, preparation, assembly, and installation of the battery storage system.
Claiming the Tax Credit
- Form Preparation:
- Use IRS Form 5695 (Residential Energy Credits) to claim the tax credit.
- Follow the instructions for Form 5695 available from the IRS.
- Filing the Tax Return:
- Submit the completed Form 5695 with your annual tax return.
- Claim the credit for the year the system was installed (e.g., installed in 2024, claim on 2024 tax return).
- Tax Credit Amount:
- The 30% tax credit applies to the total eligible costs of purchasing and installing the battery storage system.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-is-the-process-for-installing-battery-storage-to-qualify-for-the-tax-credit/
