By Neil Seidler, CPA, CMA
Question: I installed solar panels on my motorhome in 2020. Does that qualify for the Solar Tax Credit?
Answer: 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!