Spoiler Alert: The Living Vehicle Qualifies

What could be better than producing environmentally clean electricity that’s silently working for you while exploring the vast and magnificent Great Outdoors? Thanks to a Federal tax rebate program, the added bonus is paying little or nothing for it. The US government offers a solar tax credit to encourage American homeowners to install and use solar power in their traditional bricks-n-sticks homes or their Living Vehicle home on the road.

Living Vehicle (LV) is a state-of-the-industry, all-electric mobile living space, solar-driven smart home on wheels that can produce solar-generated power indefinitely.  And thanks to an IRS tax credit program, the installed solar collection and energy storage equipment is eligible for a tax credit under Internal Revenue Code (IRC) Section 25D for the portion of the purchase price associated with that equipment.

This article will explain the ins and outs of the Federal solar tax credit for RV requirements, its benefits, and the steps it takes to receive it. RV owners can apply the portion of their solar system purchase against their tax liability for a credit.

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What are the Benefits of the Federal Solar Tax Credit for RVs?

In December of 2022, the IRS announced additional tax credit updates included in the Inflation Reduction Act. The act covers a percentage of the solar system’s installation cost during the tax year. All individual taxpayers can claim a credit on qualifying solar energy equipment investments made to their homes within the United States, regardless of income.

IRC Section 25D allows for a 30% residential clean energy property credit for certain qualified purchases of residential energy-efficient property.  It modified the applicable credit percentage rates and added battery storage technology. Adding RV solar panels that support a solar and energy storage system is an important way to save money.

Generally speaking, a mobile dwelling unit is considered a residence if a taxpayer personally uses it for the number of qualifying days during the taxable year. The residential solar clean energy property credit is 30% of the cost of qualified solar and battery storage expenditures a taxpayer makes for residential energy efficient property. The applicable amount includes the labor costs properly allocable to the assembly or original installation of the qualified property and wiring to interconnect the qualifying property to the dwelling unit.

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How Do You Qualify for the Solar Tax Credit During Tax Filing?

To claim the credit, file IRS Form 5695 with your tax return. Calculate the credit on Part I and enter the result on your 1040.  Any unused portion of the credit can be carried over to the following tax year.  If you still need to claim the credit in a previous year, you can file an amended return to claim the credit now.

What To Consider When Making The Switch To Renewable Energy?

Your LV purchase can be considered a dwelling unit. IRC Section 280A provides that “in general, the term dwelling unit includes a house, apartment, condominium, mobile home, boat, or similar property, and all structures or other property appurtenant to such dwelling unit,” as long as such dwelling unit “provides basic living accommodations such as sleeping space, toilet, and cooking facilities.” The qualification of your LV as a dwelling unit has been confirmed by case law.  The IRS has confirmed that under Section 25D, a taxpayer can claim the credit for qualifying expenditures incurred for either an existing or new dwelling, which includes an LV home on the road.

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How Long Will the Solar Tax Credit Be Applicable?

The Residential Clean Energy Credit is a dollar-for-dollar reduction that can be claimed on federal income taxes.  The residential solar tax credit began in 2017 and continues through 2034, so this is a great time to apply for the credit.

The RV solar tax credit for RV owners applies toward purchasing a solar power system and associated costs. The program applies to seasonal RV travelers or full-time mobile lifestyle RV owners in their homes for tax purposes. Financial incentives on the dwelling units' RV solar energy system qualify, along with installation and parts costs for the entire RV solar kit, including the solar systems panels, inverters, controller, wiring, and batteries.

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Can I Claim the Solar Tax Credit on my LV?

Yes, your new LV qualifies for the solar tax credit program. To help you and your tax advisor determine the applicable portion of the overall purchase price of your LV that may be considered an eligible expenditure, Living Vehicle provides documentation at delivery of the estimated eligible solar and battery storage component costs compared to the overall cost of your LV.

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Conclusion

The tax credit offers significant savings for LV owners because LVs are packed with substantial amounts of solar equipment.  More than ever before, solar power generating systems are a cost-effective, environmentally friendly, and easy way to power your all-electric home anywhere the sun shines. Claim the tax credit you deserve and save money through tax credits that can save you thousands.

Note: This blog is for informational purposes only and should not be relied on solely as a source for tax, legal, or accounting advice. The IRS has additional resources to help determine eligibility.  For complete details, here’s a frequently asked questions link about energy-efficient home improvements and residential clean energy property credits (irs.gov).  Before claiming the tax credit, you should discuss with your tax professional the appropriate amount of tax credit that you should claim. Always consult your tax or legal professional for applicable advice and guidance.

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Learn more about solar travel trailers: Guide to Choosing the Best Solar Travel Trailers