If you are a homeowner with solar panels installed on your rooftop, you are eligible for the Federal Solar Tax Credit.
What is it?
This tax credit is the best option that Utahns can avail to reduce the total installation cost of solar panels. It’s a nonrefundable tax, also known as the Renewable Energy Investment Tax Credit.
The tax credit allows 30 percent off the total cost of the installation and purchase of solar materials. You can avail it for rooftop installation and other applications, including the following:
- Geothermal heat pumps
- Small wind energy
- Fuel cells
- Solar water heating
By 2023, this tax credit will be extended to batteries or energy storage. It doesn’t matter whether the batteries are charged by the grid or renewable energy.
The good thing about this tax credit is that there is no cap to the 30 percent. It applies whether you spend $150,00 or $150.
It is best to talk to a tax expert before availing of the tax credit. This is because your tax liability will still determine your eligibility.
Here are the factors that make you qualified for this tax credit:
- You have a newly installed solar PV system. You can claim the tax credit upon the original installation.
- You purchased and own the solar PV system but are not paying for the electricity generated or leasing the system.
- It’s installed in your residence anywhere in the US.
How do you apply for this tax credit? Everything will be easier when you have an expert in taxes guiding you from the beginning. This expert will check your eligibility for the tax credit.
You must attach the completed IRS 5695 form to your Form 1040NR, Form 1040, or your federal tax return when eligible.