How Does It Work?
The on top of local and state incentives, this federal solar tax credit gives you 30% of the final cost of switching to solar power back in tax credits including supplies, equipment, and labor. Remember, these are not a tax deduction. It is a tax credit. These tax credits will eliminate any federal taxes you owe on a dollar-for-dollar basis, increasing your government refund until it is used up. This means it has direct cash value. Very simple.
Example Of Federal Tax Incentive
Let’s say you purchased a $10,000 solar panel system in 2018. You would be able to immediately remove a full $3,000 from your 2018 taxes when filing them in 2019.
Frequently Asked Questions
When does the federal solar tax credit expire?
This federal incentive will step down to 26 percent in 2020 and 22 percent in 2021. After 2021, the residential credit will drop to zero while the commercial and utility credit will drop to a permanent 10 percent. (Source: Dept of Energy)
How do I claim my tax credits?
Filing for this federal solar tax credit is very easy, also. There is a single, one-page form required, plus your receipt from a reputable, licensed solar installer like Sunbridge.
What if I do not owe $3,000 to the federal government?
The IRS has not been very clear on this point to the date when it comes to the Residential Renewable Energy Tax Credit. However, for businesses they have directly stated that any remaining credit can be passed forward for a full 20 years.
Does Sunbridge Solar file my federal taxes?
No. This is the only incentive we are not allowed to file on your behalf. We are not certified tax accountants and can't give any legal advice. But don't worry, it's simple to fill out! You may find additional support here.
What if I have will already be receiving a refund?
If you are already receiving a refund at the end of the year, this tax credit will usually make that refund much larger since it eliminates your tax liability on a dollar-for-dollar basis.