Tax Credit: Inspection required? Claimed once?

What is required for "commissioning?" Obviously the system would need to be up and running. This is a federal tax credit, not state, and the feds don't regulate installation at a local level. Some areas of the USA have no electrical inspections and others do. Mine does.

I read the IRS explanation and will pour on over it again.

In general, what I have gathered so far from reading threads here...

All for primary residence:
1: I can claim parts cost the year it is commissioned even if I purchased them last year. (Some disagree)
2: I can add onto the system in a future year (panels, inverter, battery,etc) and claim again. (Claim once?)
3: I can then move to a new primary residence and commission a new system there .

Honestly some of these seem to contradict the "only claim once" part I had read. I don't recall reading an explanation of claimed once in contrast to the future improvement claims.

As far as commissioning goes, my system will be up and running when I claim. All equipment will be outside of my home to avoid modification of the house. Ground mount PV(either on 6x6 PT posts in the ground or some type of skid) inverter and battery in a small "shed" power building. This could be a shed, cargo trailer or small conex. This will feed the house to a "critical loads panel" that already exists via an Inter tie kit. I will be removing the generator receptacle that is on that inter tie and making the pv setup act as the " generator". Everything will be designed so that it can be taken down in a couple weekends to be put up and added onto at a future residence in 2.5 to 5 years. Plan is to run that panel all year off pv unless I need to flip the the inter tie and go back to grid for a couple days in winter. Fyi, the array could be places behind a barn and out of sight from the road.

After all that...does the IRS REQUIRE inspections as proof of commissioning in case I were to get audited? They could come to my house and see it is all there up and running.

If I claim the credit at this address will this screw the next owner of the property out of getting the credit should they want to install a system. I wouldn't want that to happen.

Yes, I could get a permit, but being relatively short term at this location, and moving it all eventually, I would prefer avoiding it this time and getting one at our next home as that will be permanent.

I am looking to claim on $8-16,000 in materials depending on final equipment chosen.

Thanks!

As I understand it, ANY new PV equipment can be claimed in the year it is commissioned.
If you add PV every year, you can claim the new equipment each year that it is added.
It does not have to be for your primary residence, but can be for a weekend property.
Anyone who OWNS the real estate property can claim the new PV equipment credit in the year they commission it.
Each piece of equipment can only be claimed ONCE.
***I am not a tax expert***

IRS does not require proof

Doesn't matter when you purchased items, it's claimable in the year you put it to use.

I found on the Turbo Tax site the question about adding on. A person specifically asked something like " If I install a system in 2023 and claim the credit in 2024 on my 2023 taxes, if I add to my system in 2024, can I claim that additional amount in 2025 on my 2024 taxes?"
The reply was yes.

You could buy a new house every year and install solar and claim the credit every year. Every owner gets to use the credit. It's not tied to the property, it's tied to the tax payer. And even if it was tied to the property, there isn't a limit. Under the rules, you spend money on solar, you claim it for the year you put it to use.

The "Claim once" statement seems simply to mean that an item can only be claimed once. Seems obvious, don't know why they added that.

wdwtx2.0 said:

***I am not a tax expert***

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But, did you stay in a Holiday Inn last night??

I claimed without a permit.

Tulex said:

IRS does not require proof

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Unless you are audited.

DIYrich said:

Unless you are audited.

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Well yeah, but that's for anything on your taxes.
To claim, no proof is required.

Unlike say, NY where I live. They also offer a 25% credit up to $5K. But you have to show proof, you have to be connected to grid, and you have to have an agreement with the power company.

Tulex said:

The "Claim once" statement seems simply to mean that an item can only be claimed once. Seems obvious, don't know why they added that.

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"Claimed once" refers to the equipment. The SAME piece of equipment can only be claimed ONCE. Hence the "new" requirement. You can't take the deduction on used equipment you buy and have installed (used panels off craigslist).

DIYrich said:

Unless you are audited.

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At that point I'm guessing they are just going to ask for proof of purchase, not require an inspection, no?

Tulex said:

Well yeah, but that's for anything on your taxes.
To claim, no proof is required.

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Some things don't need proof, like income they didn't know you had, standard deduction, etc. If you claim $1,000,000 of income, and they have no evidence otherwise, they will take your word for it.

FYI: Other than W-2 and 1099's, 99% of the things on your return don't need proof when you file.

DIYrich said:

Some things don't need proof, like income they didn't know you had, standard deduction, etc. If you claim $1,000,000 of income, and they have no evidence otherwise, they will take your word for it.

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Don't really get your point as to what I said. In general, if you claim stuff on your taxes, you need to be prepared to prove it if audited.

Lt.Dan said:

At that point I'm guessing they are just going to ask for proof of purchase, not require an inspection, no?

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I would think that except that they may want proof of when it was put into service. I don't know what would prove that in their mind.

My primary grid tied install was all permitted but no inspector showed up to look at it. I just don't think my AHJ cares all that much. Sure hope IRS only cares about the receipt and not the AHJ sign-off!

Tulex said:

Don't really get your point as to what I said. In general, if you claim stuff on your taxes, you need to be prepared to prove it if audited.

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Your original post was "IRS doesn't require proof".
You then modified to "when you file".
You also added that proof is required for anything on your taxes when you are audited.

Your modified statement that proof is not required when you file, is true for 99% of stuff on your return, not just solar tax credit.
Your statement that "if you claim stuff on your taxes, you need to be prepared to prove it if audited" is not ALWAYS true. Some things they will take without proof (particularly when it results in a higher tax liability - they won't argue with you).

Tulex said:

I would think that except that they may want proof of when it was put into service. I don't know what would prove that in their mind.

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If you are exporting, your electric bill is proof. If battery only (without export), then a dated picture of the panel showing the battery working should suffice.

Tulex said:

I would think that except that they may want proof of when it was put into service. I don't know what would prove that in their mind.

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"Auditor, sir, as you can see here on my post on diysolaforum.com dated 2023..."

But the number one thing I think the IRS would care about is receipts. I only claimed the handful of big purchases I know I could gather the order confirmations for, and not the fifty ancillary amazon purchases, etc.

DIYrich said:

Your original post was "IRS doesn't require proof".
You then modified to "when you file".
You also added that proof is required for anything on your taxes when you are audited.

Your modified statement that proof is not required when you file, is true for 99% of stuff on your return, not just solar tax credit.
Your statement that "if you claim stuff on your taxes, you need to be prepared to prove it if audited" is not ALWAYS true. Some things they will take without proof (particularly when it results in a higher tax liability - they won't argue with you).

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The only thing I changed in my original post was the last line was added.

The receipts for the items purchased is what an irs auditor will ask about - also if the story you tell them makes sense and seems reasonable.

This year I did the third solar tax credit on my MotorHome (my primary residence). Each was a project that I added solar. I will do another in a few months.

I don’t have any worries about an audit personally. If I were audited, I would take several pictures of the solar system - writeup my story of what I did and when, and copy all the receipts/records for the year that’s being audited. Because I took the credit as allowed by the irs, and I am not bending or stretching the rules - it will not be an issue.

The IRS auditors are not going to be a hard nosed impossible to work with - they are just doing their job. At work, The three IRS audits I have been near have all been nice pleasant experiences experiences with professionals. Help them do their job, give them the documentation they need for their audit report, smile and be professional and you don’t have anything to worry about - especially if you are on the correct side of the law and taking a correct deduction or credit. (If you are trying to cheat the system and take credits for stuff you never bought - I don’t know how that audit will turn out).