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
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.