How To Get The Residential Solar Tax Credit
Are you a home owner that wants to save on energy costs? Are you a business owner that is concerned about your carbon footprint? Lawmakers have a tax credit just for you. The residential solar tax credit gifts homeowners who install a solar water-heating system and/or a solar electric system. You’ll get a hefty 30 percent tax credit on the money you spend to get the system in place. In addition, this tax credit is a true 30 percent. It has no limits on the amount you can collect from the 30 percent tax credit. Therefore, if you’re in the right area with right installation, a solar system might be just for you.
Here are a few things you should know in order to take advantage of this tax break.
The Residential Solar Tax Credit “Good News”
1. The residential solar tax credit is for your primary home, second home and vacation property. The tax law names this tax code section “Residential Energy Efficient Property”. The eligible costs include materials and all labor costs associated with the installation.
2. Your solar credit is a nonrefundable tax credit. You can use it to reduce your tax liability to zero. You cannot use it to create a tax refund.
3. Your solar credit can carry forward to subsequent years if you can’t use the tax credit in the year of your installation.
4. If your solar panels make up part of the roofing material or structure, the law allows the entire expense to be eligible for solar tax credit.
5. The solar installation on a rental property does not qualify for the residential credit, but it DOES qualify for the 30% commercial energy credit.
6. If you have an office inside your home, you will receive a 30 percent credit, but you have to use both the residential and the commercial tax credits if the office takes up more than 20 percent of your home.
The Residential Solar Tax Credit “Bad News”
1. If the solar equipment also heats your swimming pool or hot tub, you may NOT claim tax credit on the equipment.
2. You may not claim the tax credit if you purchase a house with the solar panels already installed, unless you’re purchasing a home from a home builder. Unfortunately, only the first users of the solar panels can lay claim to this tax benefit.
Let’s Find Treasure Together
If you are a small to medium size business working primarily out of your residence, discover all the ways you can be saving on home office deductions. We will do a complimentary review of your personal & business tax returns to unearth “buried treasure” in the form of missed tax deductions. Together, let’s keep your treasure safe from the REAL pirates…the IRS.