Tax Corner: Tax credit for solar panels on an RV?

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By Neil Seidler, CPA, CMA

Question:  I installed solar panels on my motorhome in 2019.  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, so 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.

The credit for 2019 is 30% of the total cost of installing solar panels. 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.

The credit is available for 2020 and 2021, as well, but with reduced amounts. In 2020 the credit will be reduced to 26%, and in 2021 it is further reduced to 22% of the total cost of the system. After 2021 there is no credit for residential solar systems.

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’ve had several inquiries regarding tax return preparation services and other accounting and bookkeeping services that we provide. If you’re looking for someone to take care of your monthly bookkeeping needs, annual tax filings, or other accounting matters please send me an email at TheRVTaxGuy@gmail.com . We’re always happy to talk to you.

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.

The material presented here is for informational purposes only and is not intended to
provide, and should not be relied on for tax, accounting or legal advice. Readers should
consult their own tax, accounting and legal advisors to discuss their own personal
matters.

Neil Seidler, CPA, CMA, has served businesses and individuals across the USA and Canada for 35 years. As an avid RVer and recent full-timer he has a unique perspective on RV tax issues.

Read Neil’s previous posts here.

##RVT931

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Billy Bob Thorton
7 months ago

” 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.

Bunny123
8 months ago

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.

Billy Bob Thorton
7 months ago
Reply to  Bunny123

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!

TravelingMan
8 months ago

We installed on Dec 11, 2019…We are taking the full 30% here in January…

Ray Cordero
8 months ago

I took the credit in 2017 without any problem.

Billy Bob Thorton
7 months ago
Reply to  Ray Cordero

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.

Bill Semion
8 months ago

What if you installed 2 years ago and never claimed?

Joey Adams
8 months ago
Reply to  Bill Semion

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.

Ray Cordero
8 months ago
Reply to  Bill Semion

Yes, but double check with your tax rep.

Billy Bob Thorton
7 months ago
Reply to  Bill Semion

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.