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How does IRS verify solar credit

The Residential Clean Energy Credit offered by the Internal Revenue Service (IRS) provides an annual tax credit for investing in renewable energy systems for your home. Here’s how it works and how the IRS verifies eligibility:

  1. How It Works:

  • The credit equals 30% of the costs of new, qualified clean energy property installed in your home anytime from 2022 through 2032.

  • The credit percentage rate phases down to 26% for property placed in service in 2033 and 22% for property placed in service in 2034.

  • You can claim the credit every year until it begins to phase out in 2033.

  • The credit is nonrefundable, meaning it can’t exceed the amount you owe in tax, but any excess unused credit can be carried forward to reduce future tax liability.

  • Qualified expenses include the costs of new clean energy property such as solar panels, solar water heaters, wind turbines, geothermal heat pumps, fuel cells, and battery storage technology (beginning in 2023).

  • Used (previously owned) clean energy property is not eligible.

  • Fuel cell property has specific credit limits.

  • The credit applies to new or existing homes located in the United States.

  1. Verification Process:

  1. Who Qualifies:

In summary, the IRS verifies solar credit eligibility through proper documentation, and the credit can significantly offset the costs of clean energy installations in your home. Contact Cardinal Power Systems, a Michigan Solar Company, to learn more about building energy independence at (800)936-5386.



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