When you purchase and install a solar system, you are eligible for a solar investment tax credit. This was developed to support the deployment of solar energy in the United States. Long story short, solar energy is the way to go. Here are five things to know about the big bucks you can get from Uncle Sam for installing solar power in your home.
2. You need to install by December 31, 2016.
If you purchase and install your solar system before the end of the calendar year, you can receive this credit when you file for your 2016 taxes. This means you can begin getting your money back in only a matter of months!
3. It can be up to $10,000 off the cost of installing solar.
Yep, you read that right. Right back into your wallet it goes. If you’ve ever renovated your kitchen, finished your basement, or put an addition on your home, you know it’s not only pricey, but the government doesn’t give you any of that money back! Just like those home improvement projects, solar adds significant value to your home.
4. It’s a credit.
The credit amount is taken directly off your tax payment, rather than as a deduction from your taxable income. So, it’s given to you in addition to any refund you’re owed. But it’s important for you to know the tax credit only offsets tax that you would otherwise have to pay. Everyone’s tax situation is different, so be sure to consult with your tax advisor about how much you will benefit from the credit.
5. Everyone’s tax situation is different.
The cost of your unique solar system, your taxable income, the amount withheld for federal taxes and your specific circumstances will determine how much money your credit is. Here is one example for you:
- Cost to install solar system: $30,000
- Taxable income: $60,000
- Amount withheld for federal taxes: $18,000
- Federal tax liability: $15,000
- Tax refund: $3,000
- Solar credit: $9,000
- Total back from government: $12,000 (time to break into your happy dance!)
So here’s your action plan. Call Icon Solar (like, now). Purchase and install solar. Roll out your red carpet and walk into tax season like the superstar you are.
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