As the global shift towards renewable energy gains momentum, homeowners are exploring alternative methods to power their properties. Among the various options, solar energy stands out as one of the most popular and practical choices. For those contemplating the installation of a solar-powered gate on their property, it's worth noting that the U.S. Federal Government offers a tax credit to homeowners who invest in these gates.
This tax credit serves as a compelling incentive for properties to embrace solar energy systems, effectively reducing the initial costs associated with installing a solar-powered gate. In this blog post, we will delve into the essential details and provide a few resources regarding the federal tax credit for solar gates.
Important information from All Security Equipment:
"Select gate operators qualify for a 26% tax credit (this has increased to 30% since AllSecurity posted this article) when purchased with solar panels.
The US Federal Government is offering financial incentives to homeowners for the use of solar-powered systems at their home. Homeowners are able to apply for a Federal Tax credit equal to 26% (30%) off the installed cost of their Solar-Powered Gate Operator System.
What is Covered: The solar tax credit applies to the total installed cost of the solar gate opener system. This includes the related solar panel, opener, access control device, remote controls, obstruction detection device(s), etc.
What is Not Covered: The cost of the gate itself, or work required to place the physical gate into proper working order (leveling the gate, replacing hinges, etc.)."
Qualifications:
The installation of a solar gate system can qualify for a 26% (30% for 2023) tax credit on the installed system cost.
The credit for solar electric property and solar water heating property, however, is available for property placed in service through December 31, 2022, based on an applicable percentage.
The applicable percentage is:
In the case of property placed in service after Dec. 31, 2020, and before Jan. 1, 2022, 26%.
You will need to use Federal Tax Credit form 5695, Residential Energy Efficiency Property Credit.
You will need to provide a copy of the 'Manufacturer's Certification for Credit'
The dwelling must be located in the United States and be used as a residence by the taxpayer.
This offer is only available in the United States."
FORM 5965 INSTRUCTIONS
Quick overview of Form 5965 instructions:
Use the first part of form 5695 to calculate your tax credit. File your credit as "qualified solar electric property costs". On line 1, write down your total calculation of costs specified in your (this is usually under a line item titled "Automation" --but feel free to give us a call if you're unsure! Finish the calculations on line 6a and 6b.
Next, calculate tax liability limitations using the worksheet titled "Residential Energy Efficient Property Credit Limit." Complete the required calculations on lines 15 and 16, then enter that figure on line 5 on your schedule 3 form. Any unused amounts of the tax credit will be carried forward to future years.
IMPORTANT THINGS TO NOTE:
-The Solar Tax Credit is refundable. If you don't owe any taxes, you'll still receive a refund of the tax credit amount.
-There is no maximum refund amount.
-The residential clean energy credit (Part I) is available for both existing homes and homes being constructed. The energy efficient home improvement credit (Part II) is only available for existing homes.
-The residential energy efficient property credit is now the residential clean energy credit. The credit rate for property placed in service in 2022 through 2032 is 30%.
This article is meant to be a helpful reference for anyone interested in the solar gate federal tax credit--however, you should always check with your tax professional for advice and instruction regarding your taxes.
If you're interested in getting started on your new fence or automated gate installation, contact us today!