Take advantage of federal solar tax incentives now.
A lot of homeowners have hesitated about installing solar panels because of cost. But, in addition to many state incentives to go solar, there are federal tax incentives that make this energy-saving technology a great buy right now. As has been the case with past energy-related tax programs, many of these incentives will be phasing out in the near future.
Here are two things Apex Solar Solutions wants you to know about tax incentives that are in place for homes or businesses now:
- Federal tax form 5965 explains the specifics, but essentially, you can receive a 30 percent tax credit for the costs of your solar installation. This called the Investment Tax Credit (ITC). (Beware: This credit only lasts through 2019, and will begin to reduce after that date. In 2020, it will go down to 26 percent, in 2021 to 22 percent, and 2022 and onward, the credit will go away completely for residential users, but will be 10 percent for commercial users.) Keep in mind that a tax credit is different from a tax deduction. A deduction lowers your taxable income, while a credit actually lowers your tax bill.
- Some states also offer solar tax credits. Naturally, these credits vary in amount from state to state, but in some places, this credit could be as high as 25 percent. This means that if you combine your federal and state tax credit, your total tax credit could be close to 50 percent or higher (keep in mind that the state credit will reduce your federal income tax deduction slightly). The best way to learn your unique opportunity with tax credits is to check with your accountant.