Electric Vehicle Home Charging Credit

[Ephesians3-14]

I have a client who wants to know if he installs a Tesla battery in his house in case of a power outage if he can claim a tax credit. The cost of the installation is $23,000. Are there any of these tax credits available for 2021 (or 2022) if he installs a charging station in his home?

[IRonMaN]

The purpose of energy credits is to decrease energy consumption.  Having a backup just in case something happens doesn't really sound like it is being installed to decrease consumption so I think you have a "no" on that one.

[TaxGuyBill · Accepted solution]

Installing a Tesla battery on a house has nothing to do with a vehicle (like your title mentions).

They are usually used on connection with solar panels.  If the taxpayer has solar panels that are charging the battery, yes, the battery qualifies for the Solar Credit.  If not, no, there is no credit or deduction.

[PATAX]

$23,000 is a lot of money for a backup house battery... Why not just buy a generator that you can get for under a thousand? If you live in Beverly Hills maybe get two or three generators... Just my opinion...

[IRonMaN]

I’m guessing because an ACME generator isn’t as cool as a Tesla battery.  Or someone threw out the idea thinking they were going to get all of their investment back on their next tax return.

[PATAX]

Yeah you are exactly right Iron Man... Years ago had a client that bought a hybrid vehicle and thought he was going to get a huge tax credit refund... He had no taxable income and already received all his money back and since the credit was nonrefundable he got nothing for his new hybrid vehicle... He wasn't a happy camper,, but too bad, he shouldn't have listened and taken tax advice from a Salesman... just my opinion

[qbteachmt]

This is very confusing; I hate it when someone wants to over-justify their actions.

Is it battery backup?

Is it a car charger?

Have you read what Tesla tells you about it?

https://www.tesla.com/support/incentives

[Terry53029]

Yes there is a credit for your client. From instructions form 8911 "• To recharge an electric vehicle, but only if the recharging property is located at the point where the vehicle is recharged.

Link: https://www.irs.gov/pub/irs-pdf/i8911.pdf

[BobKamman]

I always ask my son about these things, they're a two-Tesla family.  But I notice, also from those instructions, "For property of a character not subject to an allowance for depreciation placed in service at your main home (personal use property), the credit for all property placed in service at your main home is generally the smaller of 30% of the property’s cost or $1,000."

So if the choice is between a generator or a small battery, both for $3,000, why not choose the battery and get the tax credit?  But then, as long as you're buying a battery for the car, why not buy a bigger one that will supply the entire house when an arctic freeze comes south and turns off power all across the state for days on end?  At least keeping the garage heated, will keep the vehicle from losing its charge.  

[Ephesians3-14]

Right - the client didn't do a very good job of characterizing the scenario. He said "Tesla" which is actually correct, but for some that can be misleading because we always think "Oh yes, Tesla cars. It actually is a Tesla Powerwall. He told me that fact after my original post above (gotta love the taxpayer). 

And yes, a Tesla Powerwall is used in connection with solar panels. The Tesla Powerwall is described as a battery system that complements a solar panel installation or adds to an existing solar array.

As long as all of the energy used by qualified solar electric property is derived from the sun then it qualifies for the solar energy credit.

A “qualified solar electric property expenditure” is an expenditure for property that uses solar energy to generate electricity for use in a dwelling unit. The dwelling unit must be located in the U.S. and used as a residence by the taxpayer.1 1Code Sec. 25D(d)(2)

Fun stuff.

[Restore ACCT]

I found the steps, you want form 8911.

1. CREDITS 

2. General Business and Vehicle Cr

3. Go to Top and click on Energy9 Fuel Production

4. School down to : Alternative Fuel Vehicle Refueling Property Credit (8911) 

5. Enter the amount you spent in this box: Total cost of qualified property

This will generate from 8911