The Residential Clean Energy Credit (which includes battery storage) can be combined with the Energy Efficient Home Improvement Credit, though they must be claimed separately for distinct qualifying expenses. Here’s how they work together:
- Residential Clean Energy Credit
– 30% of costs for battery storage, solar, wind, geothermal, and fuel cells.
– No annual dollar limit (except for fuel cells).
– Remains active through 2034 (phasedown after 2032). - Energy Efficient Home Improvement Credit
– 30% of costs, up to $1,200/year for items like insulation, windows, and HVAC systems.
– Additional $2,000/year for qualifying heat pumps.
– Covers upgrades like ENERGY STAR-certified gas/oil furnaces (up to $600).
Key Combination Rules:
– Different categories: Use the Residential Clean Energy Credit for battery storage/renewables and the Energy Efficient Home Improvement Credit for insulation, HVAC, etc.
– Same tax year: Both credits can be claimed in a single year if upgrades occur within the same period.
– Form 5695: Separate calculations for each credit are required on this IRS form.
Example: Installing a home battery ($10,000) and a heat pump ($7,000) could yield $3,000 (30% of battery cost) + $2,000 (heat pump cap) in combined credits.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/what-other-energy-related-tax-credits-can-i-combine-with-the-battery-storage-tax-credit/
