By Neil Seidler, CPA, CMA
Question:Â I installed solar panels on my motorhome in 2020. Does that qualify for the Solar Tax Credit?
Answer:Â According to the U.S. Department of Energy you can claim a Residential Energy Credit for solar equipment in both your principal residence and a second home. Therefore, your motorhome, in fact most RVs, should qualify for the Residential Energy Credit (Solar Tax Credit). The tax credit is valid for any RV that qualifies as, or has been accepted as, a second home for tax purposes.
Percentage allowed for solar panel tax credit
The tax credit for 2020 is 26% of the total cost of installing solar panels. (It had been 30% in 2019.) The credit has been extended through 2023. The rate continues at 26% for 2021 and 2022. However, for 2023, the rate drops to 22%. There is no maximum amount that can be claimed.
As a credit, you take the amount off of your tax for the year, rather than off of your income, as is the case with a deduction. There is no limit to the dollar amount of the credit; it is solely calculated as a percentage of the total cost of the system. If the credit is greater than the amount of tax for the year, any excess credit is carried forward to next year.
How to claim the solar panel tax credit
To claim the credit, you need to fill out IRS Form 5695 or tell your tax professional that you have installed solar panels on your home or second home.
If you have not yet installed solar panels on your RV but you’re considering it, the tax credit available is a great bonus to the energy savings. But don’t wait too long. If you’re going to do it, you might as well get the added benefit (and cash in your pocket) of the tax credit.
*****
We welcome your questions and inquiries. If you have tax-related questions, or any other questions that we may be able to address, please email us or comment below and we’ll try to answer them in a future article.
If you need assistance with your tax filings or other accounting matters please feel free to contact me. I’m happy to help. You can email me at Neil@profitprocpa.com. My business website is ProfitPro Accounting and Tax, or call my office at (702) 754-1338.
We present this material for informational purposes only. It is not intended to provide, and should not be relied on, for tax, accounting or legal advice. Therefore, readers should consult their own tax, accounting and legal advisors to discuss their own personal matters.
Read Neil’s most recent post: All about keeping records for tax purposes, and what you can’t do!
##RVDT1565
Thanks for the article. I’ve yet to come across anyone disccussing their experinence in claiming the solar tax credit for a new RV with a solar energy system included, but I’m assuming it’s possible given that new consturction homes with solar are eligible.
I seriously doubt Jayco or Winnebago will supply a component cost list or an estimate for labor. How would one go about documenting this to ensure you’re protected from IRS scrutiny?
What is wrong with this contributor. He refers to the U.S. Dept. Of Energy in his writings. STOP DOING THIS. ONLY refer to the US tax code and regulations, as stated by the IRS.
This guy is a CPA!!! He knows better.
Hi, BILLY Bob. Here’s a link to a PDF from the U.S. Department of Energy regarding the federal tax credit for solar energy: https://www.energy.gov/sites/prod/files/2020/01/f70/Guide%20to%20Federal%20Tax%20Credit%20for%20Residential%20Solar%20PV.pdf So you can back down, now, please. —Diane at RVtravel.com
I understand the whole tax structure more than I want to, I just don’t like the government spending OUR MONEY, on stuff that’s next to useless. Solar, Wind, it’s all just smoke and mirrors that is subsidized by the 51% who actually end up paying federal income tax. The other 49% don’t pay a dime.
Not to worry much longer, this whole thing is going to collapse soon anyway. Might as well ride into oblivion.
On a side note, why has gasoline gone up by about $.75 cents a gallon in the last month, anybody have some real factual information on that scam?
Can you take the deduction if you no longer itemize as the standard deduction has been increased and now we longer itemize???
Looking at the 1040 form, this is a tax credit. It would be a credit against your Adjusted Gross Income (AGI) after the standard deduction. Sa, at first glance you could claim the credit even if you have used the standard deduction. (Inst F5695, Schedule 3 and 1040).
Yes
Is this tax credit just for the cost of the solar panels or the entire system, i.e., lithium batteries, upgraded inverter, etc? I am a full time RVer so this is my primary residence and I just bought my rv. I paid to have 2 additional solar panels put on but I am also looking at about 600ah of lithium batteries and possibly more solar panels and a 3kw inverter to go along with my 2kw inverter. Guessing around another $8-10k.
Good Question! There are many of us who are full-timers who have the same question. It should not be an exclusion for the full-timer if the part-timers receive the credit.
I am shocked to see, nobody noted- that on form 5695 line 10 clearly state you only get a $1,000.00 credit for each Kilowatt capacity- I know – very few RV have multi Kilowatts installed. Tax credit for RV Solar is a very small credit, regardless of the high end system you install. Neil, I am following the “golden rule” by saying to you – please understand what a kilowatt is, (key word for this tax credit) to an RV’er- PLEASE add to your article.
Wrong. Line 10 is for qualified fuel cell property costs. There is no such limit for qualified solar property costs which are entered on line 1.
Excellent fact. You would think the CPA who writes for this site, would mention that very limitation, wouldn’t you!
Yeah, what did firefly say, who’s right?
” according to the US Dept. Of Energy” come on your a CPA. Please site IRS tax code, not some secondary agency, who has absolutely NO AUTHORITY in taxing matters. You really should do better.
Please understand that making a comment like that, while not explaining the exact requirements that need to be met as a qualifying second home, is disingenuous. This is an RV forum, and you will cause many who are owners of RVs to think they qualify. As you know, or should know, since your a contributor to this forum, leaving it open to consult your “tax professional”, when you hold licensure as a CPA and didnt focus on that specific requirement is poor at best.
Giving form numbers, percentages that can be claimed, to the non tax professional readers here, only adds to the confusion. I have had to clean up too many of these messes in past history.
I implore you to give it another shot.
The Code Section is 26 U.S. Code § 25D – Residential energy efficient property. For every complex tax situation a person should talk with a tax advisor.
Gee, if they would simplify the tax code, we wouldn’t need a “tax professional”, to file.
You have to understand, the tax code is approximately 19 feet tall, if you were to print it on 8 1/2 × 11 paper and bind that sucker.
Also, there is a check box on the form for CPA’s who want to join the AICPA for political matters regarding Tax. You know why, because they, along with Tax attorneys, are the main lobbyists (PAC) AGAINST tax simplification. Gee, I wonder why!
When the electorate is uninformed, we have what we have today.
Thx so much for posting this tax article.
We installed a solar system on our RV at end of 2018, when the tax credits had been revoked/let expire. I didn’t know that their subsequent reinstatement in 2019 was retroactive for 2018, but after reading this article I did some snooping online and it sounds like it was retroactive. (The IRS website itself appears to be out of date wrt the multiple credit extension bills passed in 2019). If the retroactive nature is correct then I’d be able to file an amended 1040X for 2018, and the credit will go toward my 2019 taxes. That’d save me $2.5K. Nice!
Thanks! 🙂
**If the CPA author could please edit the story or post a comment to confirm/deny the retroactive aspect, that’d be great. Thx.
Please slow down on this. I know you would like the other taxpayers to subsidize a fat refund check to you, but please make sure you qualify. It’s articles like this, who do not provide source information, but instead site US Dept. of Energy, REALLY!
We installed on Dec 11, 2019…We are taking the full 30% here in January…
I took the credit in 2017 without any problem.
The IRS has three years from April 15th or the date you filed your return, to ask you to prove your entitled to said credit. Just a guess, but your not out of the woods until on or about April, 15th, 2021.
What if you installed 2 years ago and never claimed?
You can file an amended return for up to 3 years to receive a refund. Use form 1040X (Amended Tax Return) along with Form 5695 (Residential Energy Credit) for the year you want to claim the credit. Include a copy of your invoice for the amount you are claiming. Expect 6-8 weeks before it will be processed. I would go to irs.gov for the correct forms and instructions on how to do this correctly.
Not true. The time clock starts from three years from the due date of your return, or three from the date you actually filed, if later. The reason you might ask, because the IRS then has three years to pull out their magnifying glass to look you over! Simple,
Yes, but double check with your tax rep.
You really shouldn’t rely on this response. The actual individuals who have a qualifying secondary residence under the IRS code is much less than you are being led to believe by this non answer. Do me a favor and search IRS. Gov for the requirements to be met. Don’t get all worked up thinking you have some bigger refund coming, it’s not the way it’s designed to work here.
I think it should be said, exactly what are the qualifications for your RV to be considered a second home? Just because you install a solar system on your RV does not necessarily make it a second home. There are requirements as far as the length of time you live in the RV.
You are so, so right. But, we live in a teaser society now. Why state cold facts, they do exist, but then all the readers would read them, and deflate. This way, some will claim a credit, subsidized by the 51% who actually do pay federal tax, and hope they don’t get dinged by a desk audit review.