All of Idaho · Program
Residential Alternative Energy Device Deduction (Idaho income tax)
Run by Idaho State Tax Commission
An Idaho income tax deduction for solar, wind and geothermal systems (including geothermal heat pumps) that heat, cool or power your Idaho home, and for an EPA-certified wood or pellet stove or gas or propane heater that replaces an old noncertified wood stove. Deduct 40% of the cost the first year and 20% in each of the next three years, up to $5,000 a year.
Amounts
How much you get
Deduct 40% of the cost to buy and install the device in the year it's placed in service, then 20% in each of the next three years: 100% of the cost over four years. The deduction for any one tax year is capped at $5,000, so the most you can deduct in total is $20,000. This lowers taxable income, not the tax itself.
The deduction for any one tax year is capped at $5,000, so the most you can deduct in total is $20,000.
Eligibility
Do I qualify?
You need to meet all 4 of these, plus one that applies only in some cases.
Your home is in Idaho.
You file an Idaho individual income tax return (Form 40, with Form 39R).
The device must serve your residence in Idaho. If you buy a home with a device whose deduction wasn't fully used, you can take the unused balance.
Qualifying devices: a system using solar radiation, wind or geothermal resources primarily to heat, cool or produce electricity; a fluid-to-air heat pump on a reservoir heated by solar or geothermal (an air-to-air heat pump doesn't qualify unless it uses geothermal resources); or a natural gas or propane heating unit, EPA-certified wood stove or pellet stove that replaces a noncertified wood stove.
What to doChoose a qualifying system. Ordinary air-source heat pumps don't count.
- Only in some cases
When replacing a noncertified wood stove, you must surrender the old stove to a DEQ-authorized site within 30 days of buying the new unit, in the same year, and keep DEQ's receipt.
What to doTake the old wood stove to a site the Idaho Department of Environmental Quality authorizes and keep the receipt.
Equipment
What equipment counts
Applying
How to apply
You claim it on your tax return. Claim on your Idaho return for the year the device is placed in service (due April 15 for calendar-year filers), and on each of the following three years' returns.
- Keep your receipts and invoices for the device and its installation.
- Fill out Form 39R, Part B, line 5 (lines 5a to 5d) with your Idaho Form 40.
Enter the device type and total cost on the line for the year you acquired it and multiply by the year's percentage (40% the first year, 20% after). Line 5e can't be more than $5,000.
- Claim the remaining 20% on each of the next three years' returns.
Forms and instructionsIdaho State Tax Commission - 2025 Individual Income Tax Forms and Instructions (EIN00046, 03-02-2026), Form 39R instructions, Line 5 · Idaho Code 63-3022C, Deduction for alternative energy device at residence · Idaho OEMR - Incentives (Idaho Residential Alternative Energy Tax Deduction)
Questions about applying(800) 972-7660
Stacking
Use it with
Your address
Next steps
Check that it covers your address. Then, if you want, ask for a contractor quote.
Is it available at your address?
Before anything else
Your quote request is in If a contractor we work with serves your ZIP, they can contact you. We take one request per person; contact us to change it.
Get an email if this program changes
We'll write if its amount, status or deadline changes. Nothing else.
FAQ
Questions
How much does Residential Alternative Energy Device Deduction (Idaho income tax) pay?
Deduct 40% of the cost to buy and install the device in the year it's placed in service, then 20% in each of the next three years: 100% of the cost over four years. The deduction for any one tax year is capped at $5,000, so the most you can deduct in total is $20,000. This lowers taxable income, not the tax itself.
Do renters qualify?
The device must serve your residence in Idaho. If you buy a home with a device whose deduction wasn't fully used, you can take the unused balance.
Do I need approval before I buy?
When replacing a noncertified wood stove, you must surrender the old stove to a DEQ-authorized site within 30 days of buying the new unit, in the same year, and keep DEQ's receipt. Take the old wood stove to a site the Idaho Department of Environmental Quality authorizes and keep the receipt.
What’s the deadline?
No fixed deadline. Apply any time while it’s open.
Is it still available?
Yes. It was open when we last checked, on October 27, 2026.
Does an air-source heat pump qualify?
No. An air-to-air heat pump doesn't qualify unless it uses geothermal resources as part of the system.
I bought a house that already has solar. Can I take the deduction?
Yes, if the full deduction wasn't taken. A buyer of an Idaho home served by a device can take the deduction or its unused balance.
Plain words
Words used on this page
References
Sources
This page is built from these official pages, run by the program itself.
- Idaho State Tax Commission - 2025 Individual Income Tax Forms and Instructions (EIN00046, 03-02-2026), Form 39R instructions, Line 5
- Idaho Code 63-3022C, Deduction for alternative energy device at residence
- Idaho OEMR - Incentives (Idaho Residential Alternative Energy Tax Deduction)
- Idaho State Tax Commission - Form 39R, Resident Supplemental Schedule
When one of these pages changes, we re-check this page against it.
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