Do You Qualify for the Solar Tax Credit?
You may not be aware that the government rewards those who install solar panels on their homes with a tax credit when they file their tax returns. If you’re one of those homeowners who have made the move to solar, you should get credit for your good habits with a solar tax credit to reduce your taxes.
What is the Solar Tax Credit?
The solar tax credit is officially known as the Federal Residential Renewable Energy Tax Credit. It is available for homeowners who live in specific approved zip codes. They have installed solar panels which they bought. You don’t even have to come up with a down payment for many of these lease programs. The result is a tax credit and rebates for installation of the system.
With this credit, you can deduct 30 percent of the cost of installation from your taxes. There is no limit on the credit and it applies to both homeowners and business owners. The original credit was approved in 2006 by Congress and was given an extension for five years until 2021.
Who Qualifies for the Solar Tax Credit?
The government designated certain areas to receive this tax credit. You can check your eligibility for free online. All you must do is answer a few questions and you can find out how much savings you get. If you don’t have enough of a tax liability in one year to use the entire credit, it will roll over to the next year. This means you don’t lose out on the tax savings but get to enjoy them in the following years.
It’s a good idea to take advantage of this tax credit now if you haven’t installed solar panels. According to the extension, you get the full 30 percent if you’ve started construction on the solar panels anytime before the end of 2019. In 2020, you can receive a 26-percent tax credit. It drops to 22 percent in 2021. After that year, the residential credit will go down to zero while commercial credits will stay at ten percent.
The Result of the Tax Credit
Thanks to the tax credit, going solar has become more affordable. Experts predict that the addition of solar will go from its current 27 gigawatts installed now to almost 100 gigawatts by 2021. This means more people will be able to save money on utility costs and help protect the environment. Because this tax credit makes it more affordable to install solar, more homes will convert to solar.
If you’re interested in having solar installed on your home, learn more about it now. If you already have solar panels in place, include the cost of installation on your tax return so you can enjoy the benefits of the tax credit.
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