What is the Solar Investment Tax Credit?
The Solar Investment Tax Credit (ITC), sometimes referred to as the Federal Solar Tax Credit, allows you to deduct 30% of the cost of installation for a solar PV system. This deduction is available at no cap, making it a great way to bring down the cost of installing the solar system of your dreams!
Who and What Qualifies to claim the ITC?
The ITC is available to anyone who owns and installs a solar PV system that is made operational in the same year the taxes are being filed. This means if you purchase, install, and are making power in 2019, you will be eligible for the credit on your 2019 federal tax return. The entire cost of your system can be used to receive the credit. This include parts, labor, and even roof repairs required for the system. There are some limitations to including the cost of a new roof for the credit, so make sure you work with your tax professional to see if yours will qualify. This credit is available for both commercial and residential properties….for now.
Why is this important now?
The reason this year is so important is because 2019 is the last year that the tax credit will be available at the full 30% rate. By 2021, the credit is reduced to 22% for both property types; and starting in 2022, the credit will be reduced to 10% and will be available to commercial properties only.
How do I claim the ITC?
Claiming the credit is easy. Just make sure you hang on to invoices and receipts pertaining to the project, and let your tax professional know you installed a Solar PV System within that tax year. If you do your taxes on your own, you will need to fill out a Tax Form 5695. Instructions for filling out this form accurately can be found here.
In order to ensure your system is eligible to claim the 30% tax credit on your 2019 taxes, schedule a FREE solar site visit today. You can either use our convenient online scheduling tool, or call us at 1-920-893-8388.
This post was written by Brianna Russell