The federal tax credit is a credit for investing in renewable energy such as solar and wind power. The credit reduces your federal tax liability when you file with the IRS. For example, if you get a credit of $3,000, that means you pay $3,000 less in taxes when you file that year’s return.
Some facts regarding eligibility for the Federal Tax Credit:
Every individual's tax situation is different. Please consult a tax professional to make sure your situation is applicable.
In December 2015, the Consolidated Appropriations Act extended the 30% credit for residential solar to the end of 2019. It then steps down over two years and expires completely at the end of 2021.
The law permitting the federal tax credit is 26 USC Section 25D. It says:
And the IRS definition of "dwelling unit":
Finally, is an RV considered a mobile home? For that we look to this US Tax Court memo 2014-160 on Jackon & Jackson v. Commissioner, page 14:
Although we use the more modern term throughout this opinion, an RV and a motor home are one and the same thing. Petitioners and counsel used the two terms interchangeably at trial. Accordingly, petitioners’ RV is a dwelling unit for purposes of section 280A.
This information is a starting place for research only. We are not tax professionals and this does not constitute legal or financial advice. If you are uncertain, please check with a tax professional first!
The Emergency Economic Stabilization Act of 2008, which was signed into law on October 1, 2008, was a boon to the renewable energy market. Not only was the 30% commercial solar investment tax credit extended through 2016, but the same tax credit was also extended to residential installations.
Under this legislation, the previous $2,000 cap for residential solar installations was eliminated. As of January 1, 2009, the purchase of a residential solar electric system makes you eligible for a tax credit equal to 30% of the cost of your solar system, including installation.
For more info, read our plain-English primer on the federal tax credit to see if you’re eligible and learn how to claim. You can also download our free Federal Tax Credit Guide for step-by-step directions on how to file for your credit with the IRS.