What are the Tax Benefits of Going Solar?
So, you’ve maybe heard that going solar could help provide some tax relief or offer incentives that could be enticing to American tax payers. It can be fairly confusing to understand whether or not solar installation is a liable investment. We admit that it may not be worth it for everyone, but it sure helps to identify the pros and cons of both sides. In this article we further discuss the possible savings on taxes as a result of going solar.
First, let’s understand what a tax credit is…
A Tax Credit is basically a dollar amount reduction in the taxes you owe. For example, if you owe the IRS $500 in taxes then a tax credit of $300 would decrease your owed taxes to $200. The Federal Solar Tax Credit is a credit that can be claimed on federal taxes for a percentage of the cost of a photovoltaic system paid by the certain tax payer. The installation of the system must be completed in the corresponding tax year.
From now until 2032, Congress has approved a 30% tax credit for solar power systems installed. There is no limit for what can be claimed on these systems. This can definitely be an enticing option to consider when thinking about installing solar at your residence or business.
Eligibility For Solar Federal Tax Credit
- System installed between 2017 and 2034
- Located in the United States at a residence you own
- Ownership of the solar system installed
- Original Installation of the photovoltaic system
Solar Installation does introduce some attractive tax credits and savings that should be considered.
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