utilitys

Solar ITC and what it means for you!

Solar+ITC

“The Solar ITC goes down in 2020 to 26%”

What does this mean for you? It can mean missing out on thousands of dollars in savings! For the average sized solar system in the US it can mean a difference of close to $10,000 dollars.

To break down the full current tax credit Schedule lets take a look at this image:

Tax Schedule

This is the current schedule assuming the Federal Government does not change it between now and the end of the year.

Now how late is to late to act in 2019 you might ask? To take full advantage of the 30% tax credit in 2019 the project must have commenced construction. Looking at historical deadline rushes in the industry it would be recommended to have signed up for your solar system no later than the 1st of December 2019.

As long as you own your solar energy system, you are eligible for the solar investment tax credit. Even if you don’t have enough tax liability to claim the entire credit in one year, you can “roll over” the remaining credits into future years for as long as the tax credit is in effect.

How do I claim the investment tax credit?

You claim the investment tax credit for solar when you file your yearly federal tax return. Remember to let your accountant know you’ve gone solar in the past year, or if you file your own taxes make sure that you check the box for the ITC.

You are eligible for the Federal ITC as long as you own your solar energy system, rather than lease it.

If your federal tax liability is lower than the total amount of your ITC savings, you can still take advantage of it by carrying over any remaining credits to the following year.

Here’s an example: You pay $20,000 to install a solar system on your home in 2018, which means you are eligible for a $6,000 federal solar tax credit. If your federal tax liability for 2018 is only $4,500, you will owe no federal taxes that year, and in 2019, you will reduce your tax liability by $1,500.

Updated as of 4/16/2019