|Residential Alternative Energy Tax Deduction
|Idaho Tax Commission
|Solar - Passive, Solar Water Heat, Solar Space Heat, Solar Photovoltaics
This statute allows taxpayers an income tax deduction of 40% of the cost of a solar, wind, geothermal, and certain biomass energy devices used for heating or electricity generation. Taxpayers can apply this 40% deduction in the year in which the system is installed and can also deduct 20% of the cost each year for three years thereafter. The maximum deduction in any one year is $5,000. The total maximum deduction is $20,000.
Eligible biomass energy devices include a pellet stove or EPA-certified wood stove if:
The deduction for full year residents is calculated on the Idaho Supplemental Schedule 39R, section B, with the result transferred to Idaho Form 40. For part year and non-residents of Idaho, the deduction is calculated on Idaho Form 39NR, section B, with the results transferred to Idaho Form 43. Forms, instructions, and publications for the current and previous years can be found here.