All Things Tax

All Things Tax

Like the title says, from the filing process and tax questions to tax policy and reform, you can search and share All Things Tax here. This is the place to find answers to all your general questions that don't fall under the other categories. And just a reminder: questions about software or online filing should be posted in DIY Products.

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Pioneer
Posts: 2
Registered: ‎04-20-2017

Solar Panel deductions in 2016 or 2017

I was told by a local "tax advisor" that only the cost of solar panels qualify for the tax credit.  Specifically, installation labor cost does not qualify.  So if my solar contract is for $20,000 and installation is $5,000 of that contract, I can only enter $15K.  Is that correct? 

Tax Pro
Posts: 5,609
Registered: ‎02-23-2016

Re: Solar Panel deductions in 2016 or 2017

[ Edited ]

Hi xafnav,

 

Welcome to the H&R Block community.

 

Yes, you are correct.  The amount you can enter for your credit is the cost of the solar panels themselves.  So you'll enter $15,000 for the credit in your scenario.

 

Make sure you enter this on Part I of Form 5695.  Solar systems are one of the four items that qualify for the credit that's worth up to 30% of their cost.

 

If you have any other questions I'll be glad to help.

 

Louis,

Senior Tax Advisor (Tampa, FL)

Pioneer
Posts: 2
Registered: ‎04-20-2017

Re: Solar Panel deductions in 2016 or 2017

Louis,

Thanks for the information.  Since your response, I've checked with two engineers (not CPAs) who have assured me that you are wrong and that the entire system - including installation -- qualifies for the credit (assuming that I'm paying for the installation and not doing the installation myself.  If I was doing the installation myself, I'd charge $400 or $500 per hour because I value my time so highly....and I could understand the IRS not being happy with that.)