Federal Tax Credit For Solar Installation
The Sun for energy just feels good — solar power reduces our use of coal, nuclear and other fossil fuels, thereby helping reduce your individual carbon footprint.
Encouraged Americans use solar panels to power their homes , the Environmental Protection Agency and the Department of Energy run the Energy Star program, among other projects. Tax credits for solar-powered systems are given to qualified applicants.
Credits for Approved Solar System Installations
When you install Energy Star-approved solar-power systems before the end of 2016, you can claim 30 percent of the cost as a tax credit for the year you installed it.
As a credit deduction, you take the amount off your tax’s, rather than as a deduction from your taxable income. You can claim the credit for your main residence, a vacation home, and for either an existing structure or new construction. That means other than the cost of the system, there’s no limit to the dollar amount of the credit.
Claiming Solar Credits for Rental Property
You can’t claim a credit for installing solar power at rental properties you own.
The only exception is if you live in the home for part of the year, Tip: Use it as a rental when you’re away on vacation. You’ll have to reduce the credit for a vacationing home, rental or otherwise, to reflect the time you’re not there. If you reside there for three months a year, you can only claim 25 percent of the credit: If the system cost $20,000, the 30 percent credit would be $6,000, and you could claim a quarter of that, or $1500.
Filing Requirements for Solar Installation Credits
To claim the installation credit, you must file your IRS Form 5695 as part of your tax return, you can calculate the credit on the form, then enter the result on your 1040.
If you end up with a bigger credit than you have income tax due — a $6,000 credit on a $3,500 tax bill, for instance — you can’t use the credit to get money back from the IRS. But, you can carry the credit over to the following tax year. Energy Star states like California are able to carry the credit over as far as 2016 if need be.
Federal Tax Credits for Energy Star Solar Systems
Not all ENERGY STAR qualified products qualify for a tax credit. ENERGY STAR distinguishes energy efficient products. To find out more about the specific qualified ENERGY STAR Solar Systems Go here to the ENERGY STAR government site.
Solar Energy Industries Association
As the national trade association in the U.S., the Solar Energy Industries Association (SEIA) is the power behind solar energy. Our member companies research, manufacture, distribute, finance, and build solar projects domestically and abroad. I found this page on Solar Investment Tax Credit (ITC).
Dsireusa Information on Solar Incentives
DSIRE is the most comprehensive source of information on incentives and policies that support renewable and energy efficiency in the United States. Established in 1995, DSIRE is currently operated by the N.C. Solar Center at N.C. State University, with support from the Interstate Renewable Energy Council, Inc. DSIRE is funded by the U.S. Department of Energy. I found this page on Residential Renewable Energy Tax Credit.