Residential Alternative Energy Tax Deduction


Program Type Personal Tax Deduction
Technologies Photovoltaics, Solar Space Heat, Passive Solar Space Heat, Solar Hot Water Heating
Amount 40 percent for the first year, and 20 percent per year for the following three years
Required Documentation Dependent on method of installation (either you or your contractor)
Official Web Site http://legislature.idaho.gov/idstat/Title63/T63CH30SECT63-3022C.htm
The Residential Alternative Energy Tax Deduction is offered for a variety of green technologies, including solar power. This allows you to deduct 40 percent of the cost of a home solar energy system from your taxes the first year, and 20 percent the following years, for up to three years. You can claim a maximum deduction of $5000 in any given year, for a total maximum of $20,000. You or your contractor will have to compile documentation to be eligible for the deduction.

One of the best things about this tax deduction is that it can be combined with federal alternative energy tax breaks that can allow you deductions of up to 30 percent of the cost of the system, with no limit on the amount; so even if your solar panel system exceeds $20,000, you can still enjoy federal tax deductions.

This particular deduction is claimed on the Idaho Supplemental Schedule, Form 39R, and you can contact the Idaho State Tax Commission at http://tax.idaho.gov for more details.