30% FEDERAL TAX CREDIT

Don’t miss out! The 30% federal tax credit on solar is going away!

Get it before year-end to benefit this coming tax season!

The year is almost over and the next tax season is right around the corner. After next year the federal tax credit is scheduled to decrease drastically before it disappears completely!

With strong opposition from powerful energy companies and special interest groups they fund, you can’t be certain it will even last as long as it has been promised. The only way to be certain you will be able to benefit from the Tax credit is to install solar right away!

As soon as 2019 is over the percentage will drastically decrease and will be gone altogether by the end of 2021.

Your system must be in place by the end of 2018 in order for it to affect your tax return next year.

Systems installed in 2019 will be the last ones eligible before it decreases and will reflect on your tax return in 2020.

SMP Accounting 600×284

Tax Credit Percentage for Systems Placed in Different Date Ranges

Before 12/31/2019
%
Between 12/31/19 - 01/01/2021
%
Between 12/31/2020 - 01/01/2022
%

PROGRAM INFO FROM ENERGY.GOV:

Sector Name: Federal

Administrator:  U.S. Internal Revenue Service

Website:  http://www.energystar.gov/taxcredits

Expiration Date: 12/31/2021

State: Federal

Rebate Amount:  30%

Summary:

Note: The Bipartisan Budget Act of 2018, signed in February 2018, reinstated the tax credit for fuel cells, small wind, and geothermal heat pumps. The tax credit for all technologies now features a gradual step down in the credit value.

A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the United States that is owned and used as a residence by the taxpayer.

Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is at a new home, the "placed in service" date is the date of occupancy by the homeowner.

Expenditures include labor costs for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home.

If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The maximum allowable credit, equipment requirements and other details vary by technology, as outlined below

Solar-electric property

  • 30% for systems placed in service by 12/31/2019
  • 26% for systems placed in service after 12/31/2019 and before 01/01/2021
  • 22% for systems placed in service after 12/31/2020 and before 01/01/2022
  • There is no maximum credit for systems placed in service after 2008.
  • Systems must be placed in service on or after January 1, 2006, and on or before December 31, 2021.
  • The home served by the system does not have to be the taxpayer’s principal residence.

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