Internal Revenue Code:Sec. 25D. Residential Energy Efficient Property
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Contents |
Location in Internal Revenue Code
TITLE 26 - INTERNAL REVENUE CODE
Subtitle A - Income Taxes
CHAPTER 1 - NORMAL TAXES AND SURTAXES
Subchapter A - Determination of Tax Liability
PART IV - CREDITS AGAINST TAXES
Subpart A - Nonrefundable Personal Credits
Statute
SEC. 25D. RESIDENTIAL ENERGY EFFICIENT PROPERTY.
(a) Allowance of Credit- In the case of an individual, there shall
be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to the sum of--
(1) 30 percent of the qualified solar electric property expenditures
made by the taxpayer during such year,
(2) 30 percent of the qualified solar water heating property
expenditures made by the taxpayer during such year, and
(3) 30 percent of the qualified fuel cell property expenditures
made by the taxpayer during such year.
(b) Limitations-
(1) MAXIMUM CREDIT- The credit allowed under subsection (a)
(determined without regard to subsection (c)) for
any taxable year shall not exceed--
(A) $2,000 with respect to any qualified solar electric property
expenditures,
(B) $2,000 with respect to any qualified solar water heating property
expenditures, and
(C) $500 with respect to each half kilowatt of capacity of qualified
fuel cell property (as defined in section 48(c)(1)) for which
qualified fuel cell property expenditures are made.
(2) CERTIFICATION OF SOLAR WATER HEATING PROPERTY- No credit shall be
allowed under this section for an item of property described in
subsection (d)(1) unless such property is certified for performance
by the non-profit Solar Rating Certification Corporation or a
comparable entity endorsed by the government of the State in which
such property is installed.
(c) Carryforward of Unused Credit.--
(1) Rule for years in which all personal credits allowed
against regular and alternative minimum tax.--In the case of a
taxable year to which section 26(a)(2) applies, if the credit
allowable under subsection (a) exceeds the limitation imposed by
section 26(a)(2) for such taxable year reduced by the sum of the
credits allowable under this subpart (other than this section),
such excess shall be carried to the succeeding taxable year and
added to the credit allowable under subsection (a) for such
succeeding taxable year.
(2) Rule for other years.--In the case of a taxable year
to which section 26(a)(2) does not apply, if the credit
allowable under subsection (a) exceeds the limitation imposed by
section 26(a)(1) for such taxable year reduced by the sum of the
credits allowable under this subpart (other than this section
and sections 23, 24, and 25B), such excess shall be carried to
the succeeding taxable year and added to the credit allowable
under subsection (a) for such succeeding taxable year.
(d) Definitions- For purposes of this section--
(1) QUALIFIED SOLAR WATER HEATING PROPERTY EXPENDITURE- The term
`qualified solar water heating property expenditure' means an
expenditure for property to heat water for use in a dwelling unit
located in the United States and used as a residence by the taxpayer
if at least half of the energy used by such property for such purpose
is derived from the sun.
(2) QUALIFIED SOLAR ELECTRIC PROPERTY EXPENDITURE - The term `qualified
solar electric property expenditure' means an expenditure for
property which uses solar energy to generate electricity for use
in a dwelling unit located in the United States and used as a
residence by the taxpayer.
(3) QUALIFIED FUEL CELL PROPERTY EXPENDITURE- The term `qualified fuel
cell property expenditure' means an expenditure for qualified fuel
cell property (as defined in section 48(c)(1)) installed on or in
connection with a dwelling unit located in the United States and
used as a principal residence (within the meaning of section 121) by
the taxpayer.
(e) Special Rules- For purposes of this section--
(1) LABOR COSTS- Expenditures for labor costs properly allocable to
the onsite preparation, assembly, or original installation of the
property described in subsection(d) and for piping or wiring to
interconnect such property to the dwelling unit shall be taken into
account for purposes of this section.
(2) SOLAR PANELS- No expenditure relating to a solar panel or other
property installed as a roof (or portion thereof) shall fail to be
treated as property described in paragraph(1) or (2) of subsection
(d) solely because it constitutes a structural component of the
structure on which it is installed.
(3) SWIMMING POOLS, ETC., USED AS STORAGE MEDIUM- Expenditures which
are properly allocable to a swimming pool, hot tub, or any other
energy storage medium which has a function other than the function
of such storage shall not be taken into account for purposes of this
section.
(4) DOLLAR AMOUNTS IN CASE OF JOINT OCCUPANCY- In the case of any
dwelling unit which is jointly occupied and used during any calendar
year as a residence by two or more individuals the following rules
shall apply:
(A) Maximum expenditures.--The maximum amount of
expenditures which may be taken into account under
subsection (a) by all such individuals with respect to
such dwelling unit during such calendar year shall be--
(i) $6,667 in the case of any qualified solar electric
property expenditures,
(ii) $6,667 in the case of any qualified
solar water heating property expenditures, and
(iii) $1,667 in the case of each half
kilowatt of capacity of qualified fuel cell
property (as defined in section 48(c)(1)) for
which qualified fuel cell property expenditures
are made.
(B) Allocation of expenditures.--The expenditures
allocated to any individual for the taxable year in
which such calendar year ends shall be an amount equal
to the lesser of--
(i) the amount of expenditures made by such
individual with respect to such dwelling during
such calendar year, or
(ii) the maximum amount of such expenditures
set forth in subparagraph (A) multiplied by a
fraction--
(I) the numerator of which is the
amount of such expenditures with respect
to such dwelling made by such individual
during such calendar year, and
(II) the denominator of which is
the total expenditures made by all such
individuals with respect to such
dwelling during such calendar year.
(C) Subparagraphs (A) and (B) shall be applied separately
with respect to expenditures described in paragraphs (1), (2),
and (3) of subsection (d).
(5) TENANT-STOCKHOLDER IN COOPERATIVE HOUSING CORPORATION- In the case
of an individual who is a tenant-stockholder (as defined in section
216) in a cooperative housing corporation (as defined in such section),
such individual shall be treated as having made his tenant-stockholder's
proportionate share (as defined in section 216(b)(3)) of any
expenditures of such corporation.
(6) CONDOMINIUMS-
(A) IN GENERAL- In the case of an individual who is a member of a
condominium management association with respect to a condominium
which the individual owns, such individual shall be treated as having
made the individual's proportionate share of any expenditures of such
association.
(B) CONDOMINIUM MANAGEMENT ASSOCIATION- For purposes of this paragraph,
the term `condominium management association' means an organization
which meets the requirements of paragraph (1) of section 528(c)
(other than subparagraph (E) thereof) with respect to a condominium
project substantially all of the units of which are used as residences.
(7) ALLOCATION IN CERTAIN CASES- If less than 80 percent of the use of
an item is for nonbusiness purposes, only that portion of the
expenditures for such item which is properly allocable to use for
nonbusiness purposes shall be taken into account.
(8) WHEN EXPENDITURE MADE; AMOUNT OF EXPENDITURE-
(A) IN GENERAL- Except as provided in subparagraph (B), an expenditure
with respect to an item shall be treated as made when the original
installation of the item is completed.
(B) EXPENDITURES PART OF BUILDING CONSTRUCTION- In the case of an
expenditure in connection with the construction or reconstruction
of a structure, such expenditure shall be treated as made when the
original use of the constructed or reconstructed structure by the
taxpayer begins.
(9) PROPERTY FINANCED BY SUBSIDIZED ENERGY FINANCING- For purposes
of determining the amount of expenditures made by any individual
with respect to any dwelling unit, there shall not be taken into
account expenditures which are made from subsidized energy
financing (as defined in section 48(a)(4)(C)).
(f) Basis Adjustments- For purposes of this subtitle, if a credit is
allowed under this section for any expenditure with respect to any
property, the increase in the basis of such property which would
(but for this subsection) result from such expenditure shall be
reduced by the amount of the credit so allowed.
(g) Termination- The credit allowed under this section shall not apply to
property placed in service after December 31, 2008.
Amendments
2006 - Tax Relief and Health Care Act of 2006 (P.L. 109-432)
SEC. 206. CREDIT FOR RESIDENTIAL ENERGY EFFICIENT PROPERTY.
(a) Extension.--Subsection (g) of section 25D is amended by striking
``December 31, 2007'' and inserting ``December 31, 2008''.
(b) Clarification of Term.--
(1) Subsections (a)(1), (b)(1)(A), and (e)(4)(A)(i) of
section 25D are each amended by striking ``qualified
photovoltaic property expenditures'' and inserting ``qualified
solar electric property expenditures''.
(2) Section 25D(d)(2) is amended--
(A) by striking ``qualified photovoltaic property
expenditure'' and inserting ``qualified solar electric
property expenditure'', and
(B) in the heading by striking ``qualified
photovoltaic property expenditure'' and inserting
``qualified solar electric property expenditure''.
2005 - P.L. 109-135
(E) Subsection (c) of section 25D is amended to read as
follows:
``(c) Carryforward of Unused Credit.--
``(1) Rule for years in which all personal credits allowed
against regular and alternative minimum tax.--In the case of a
taxable year to which section 26(a)(2) applies, if the credit
allowable under subsection (a) exceeds the limitation imposed by
section 26(a)(2) for such taxable year reduced by the sum of the
credits allowable under this subpart (other than this section),
such excess shall be carried to the succeeding taxable year and
added to the credit allowable under subsection (a) for such
succeeding taxable year.
``(2) Rule for other years.--In the case of a taxable year
to which section 26(a)(2) does not apply, if the credit
allowable under subsection (a) exceeds the limitation imposed by
section 26(a)(1) for such taxable year reduced by the sum of the
credits allowable under this subpart (other than this section
and sections 23, 24, and 25B), such excess shall be carried to
the succeeding taxable year and added to the credit allowable
under subsection (a) for such succeeding taxable year.''.
2005 - P.L. 109-135
(i) Amendments Related to Section 1335.--
(1) Paragraph (1) of <<NOTE: 26 USC 25D.>> section 25D(b) is
amended by inserting ``(determined without regard to subsection
(c))'' after ``subsection (a)''.
(2) Subparagraphs (A) and (B) of section 25D(e)(4) are
amended to read as follows:
``(A) Maximum expenditures.--The maximum amount of
expenditures which may be taken into account under
subsection (a) by all such individuals with respect to
such dwelling unit during such calendar year shall be--
``(i) $6,667 in the case of any qualified
photovoltaic property expenditures,
``(ii) $6,667 in the case of any qualified
solar water heating property expenditures, and
``(iii) $1,667 in the case of each half
kilowatt of capacity of qualified fuel cell
property (as defined in section 48(c)(1)) for
which qualified fuel cell property expenditures
are made.
``(B) Allocation of expenditures.--The expenditures
allocated to any individual for the taxable year in
which such calendar year ends shall be an amount equal
to the lesser of--
``(i) the amount of expenditures made by such
individual with respect to such dwelling during
such calendar year, or
``(ii) the maximum amount of such expenditures
set forth in subparagraph (A) multiplied by a
fraction--
``(I) the numerator of which is the
amount of such expenditures with respect
to such dwelling made by such individual
during such calendar year, and
``(II) the denominator of which is
the total expenditures made by all such
individuals with respect to such
dwelling during such calendar year.''.
Sources
Energy Policy Act of 2005, Sec. 1335(a), established new IRC Sec. 25D.
Effective Dates- The amendments made by this section shall apply to
property placed in service after December 31, 2005, in taxable years
ending after such date.
