Customer Tax Credit Information
Customer Information Regarding IRC Section 25D Tax Credit1
The following information is provided for you (and your tax advisors) to assist you in determining if you are eligible for a tax credit. The following information was prepared for informational purposes only and is not intended to provide, and should not be relied on for, tax or legal advice. As your Bowlus is equipped with solar and energy storage equipment, you may be eligible for a tax credit under Internal Revenue Code Section 25D for the portion of the Bowlus purchase price associated with that equipment. In December of 2022, the IRS released a fact sheet regarding applicable tax credit requirements and changes related to the Inflation Reduction Act entitled Frequently asked questions about energy-efficient home improvements and residential clean energy property credits (irs.gov)2, which can serve as an additional resource to you and your tax advisor to help determine eligibility.
How May the Solar and Energy Storage Equipment in My Bowlus Qualify for a Tax Credit?
The residential clean energy property credit under Section 25D is a 30-percent credit for certain qualified expenditures made by a taxpayer for residential energy efficiency. The Inflation Reduction Act extended the residential clean energy property credit through 2034, modifying the applicable credit percentage rates, and added battery storage technology as an eligible expenditure. A tax credit is available under Section 25D for specific solar3 and battery-storage4 related expenditures if installed in connection with a dwelling unit located in the United States and used as a residence by the taxpayer. The solar property must use solar energy to generate electricity in a dwelling unit5. The battery storage technology must have a capacity of not less than 3 KWh hours.6
Is My Bowlus Considered a Dwelling Unit?
Yes, your Bowlus may be considered a dwelling unit. IRC Section 280A provides that “a dwelling unit includes a house, apartment, condominium, mobile home, boat, or similar property, and all structures or other property belonging to such dwelling unit,”7 as long as such a dwelling unit “provides basic living accommodations such as sleeping space, toilet, and cooking facilities.”8
Does My Bowlus Need to Be My Primary Residence to Qualify?
The IRS has clarified that a taxpayer may claim a Section 25D credit for qualifying equipment “installed in or on a dwelling unit used as a second home or a vacation home by the taxpayer."
How is the Tax Credit Determined?
The residential clean energy property credit is 30 percent of the cost of qualified solar and battery storage expenditures a taxpayer makes for residential energy efficient property. When calculating the credit, a taxpayer may include 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.9 Please request this documentation (if applicable) before your Bowlus delivery, as it is based on the specific model costs of solar and battery storage components and applicable installation costs corresponding to your Bowlus overall cost.
Please contact your tax advisor for more information regarding the IRC Section 25D Tax Credit.
- This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. The availability and amount of the tax credit associated with the purchase of your Bowlus is subject to certain criteria and eligibility requirements. You should consult your own tax and accounting advisors regarding whether a tax credit is available to you. Bowlus does not provide tax, legal or accounting advice.
- FS-2022-40, https://www.irs.gov/pub/irs-drop/n-13-70.pdf.
- IRC Section 25D(a)(1).
- IRC Section 25D(a)(6).
- IRC Section 25D(d)(2).
- IRC Section 25D(d)(6).
- IRC Section 280A(f)(1)(a).
- Prop. Reg. §1.280A-1(c)(1).
- IRC Section 25D(e)(1).