Back in 2015, homeowners, solar companies and environmental activists alike were delighted to learn that Congress had extended the solar panel tax credit. Guess what? That extension is coming to an end soon. Yes, time flies, but the good news is there’s still a little bit of time to take advantage of the 30% tax credit on a solar installation.
The current federal solar tax credit, also called the investment tax credit (ITC), lets you deduct 30 percent of the cost of installing a solar energy system from your federal taxes. Both homeowners and business owners can take advantage of this credit, and there’s no cap on its value. However, there’s a time limit.
The tax credit only remains at 30 percent through the end of this year (2019). In 2020, you can still benefit with a 26 percent credit. In 2021, this percentage drops to 22 percent. And after that, only owners of commercial solar energy systems can deduct 10 percent of the cost of a system from their taxes. There will no longer be any federal tax credit for residential solar systems.
How to Qualify
If you purchase a solar energy system, you’ll be eligible for the solar tax credit. If you don’t have enough tax liability to claim the entire credit in one year, you can “roll over” the remaining credits into future years, as long as the tax credit is in effect. It’s important to note that you don’t get to take advantage of the solar tax credit if you lease a system. To claim the solar tax credit, you’ll include it on your yearly federal tax return.
So, if you’ve been sitting on the fence about solar, it may be time to make a decision. Want to learn more about how solar can help reduce your monthly costs and enable you to increase your commitment to the environment? Call Cool Blew Solar today for a free quote at 623-234-2836