Does residential solar installation qualify for the bonus energy credits claimed on Form 3468? Or is that only applicable to businesses? Also, if residential does qualify for the bonus credits, are there prevailing wage requirements?

[qbteachmt]

Is your taxpayer client an installer? A homeowner? We need some perspective.

[JenAnn8]

A homeowner.

[qbteachmt]

This homeowner didn't put a generating plant in the backyard? Didn't hire employees?

Are you confusing this (google it):

residential solar energy credit

with what you asked about?

[dkh]

I believe you are wanting F5695. 

[TaxGuyBill]

No, a person claiming the solar tax credit on their personal-use home does not qualify for any 'bonus' percentages or have anything to do with Form 3468.

[JenAnn8]

No, he did not install a generating facility in his backyard, but he seems to think he qualifies for 2 bonus credits.  The first is an additional 10% for domestic content and the other 10% for the geographic location of his solar panels.  We believe he only qualifies for the 30% credit, but want to make sure we're not missing something.  We believe only solar panels installed on business property qualify for the additional credits.  And he installed the solar panels himself for personal use only.

Can you reference any code sections or any official guidance on this?

We know this won't be the last client to have installed solar panels and want to make sure we are prepared moving forward.

[TaxGuyBill]

§25D is for personal use solar.  You can look through there and you'll see there are no bonus percentages.

§48 is for business.  That has bonus percentages.  But you'll see that part of the definition of "energy property" in §48 is that "depreciation (or amortization in lieu of depreciation) is allowable".

[dkh]

---

@JenAnn8 wrote:

 he seems to think he qualifies for 2 bonus credits.  The first is an additional 10% for domestic content and the other 10% for the geographic location of his solar panels.  

---

Does the client think this because of something the company he purchased the solar from told him?

I've had clients come in with some interesting ideas regarding energy credits due to tall tales the seller of the product told them.

[qbteachmt · Accepted solution]

Prevailing wage and/or Davis-Bacon provisions relate to employers who land public contracts. That part of the question was a bit startling for this issue. Your client seems to be doing some deep diving without a scuba tank.

I think your client might have been reading something along these lines:

https://www.seia.org/initiatives/solar-investment-tax-credit-itc

And confused personal use with production. Unless the person is creating a solar or wind farm, they are not a producer for purposes of these provisions.