DISCLAIMER:This article is purely informational and by no means professional tax advice nor are we professional tax advisors. For more information regarding ax credits please consult a qualified tax advisor.
If you’ve looked into solar for your home before, You’ve probably heard the words “federal tax credit” at least once. But what does it really mean for you?
The Solar Investment Tax Credit (ITC) was created back in 2005. After seeing the industry growth (solar storage capacity doubled in the U.S. by 2007) created in large part by this small, short term (originally designed to last no more then 2 years) incentive, Congress quickly passed The Energy Improvement and Extension Act of 2008. This new act extended the availability of these credits by 8 years, and increased the credit amount allowed on many new installations.
As of today, new residential solar customers now qualify for a one time tax credit of 30% of their total system cost, with no maximum limit. Simply put, if you install a new solar system on your home while this tax credit is in affect, You can deduct up to 30% from the tax dollars you owe at the end of the year, no matter how big the system! There are of course a few stipulations and variables on the solar ITC.
Here are some of the facts:(http://www.gosolarcalifornia.ca.gov/consumers/taxcredits.php):
- The home owner must have a tax liability (owe) in order to use this credit.
- The ITC is a one time credit, however in certain situtations may be carried forward if you’re not able to use it in the install year.
- The ITC is set to expire December 31, 2016
- Click Here for more information from Go Solar California
For more information regarding tax credits and incentives for adding renewable energy sources to your home, check out The Tax Incentives Assistance Project (TIAP) at http://energytaxincentives.org.