What You Need to Know about the Solar Tax Credits for 2019
There has never been a better time to upgrade your home with solar panels. Not only can these upgrades help your family save money over the long run and become more independent of the country’s power infrastructure, but the US government is actually rewarding homeowners who make these changes in 2019 with credits on their 2019 federal tax return. Wait until next year and the amount of the tax credit decreased, so it’s wise to act before December 31, 2019.
What are the solar tax credits for 2019?
Part of the Energy Policy Act of 2015, the government offers tax credits to home and business owners who buy and install qualifying solar-powered equipment. This credit is 30 percent of the cost of the equipment AND the installation but is decreasing to 26 percent for 2020 and to 22 percent in 2021 before it disappears for homeowners all together. There is no cap on this credit and “Energy Sage” estimates that the average homeowner saves around $5,000 by going solar under this program.
How do I qualify?
To qualify for the federal solar tax credits, you must own your solar energy system. If you lease your equipment or have a PPA agreement with your solar installer, you don’t qualify. In addition, you must own the home or business building in which the solar system is installed. In addition to the equipment, you can claim consulting fees, shipping costs, engineer and surveyor fees and the cost of building permits. You can claim the cost of professional installation, but not your own labor, even if you’re a professional installer.
How to claim your tax credits
The IRS makes it very easy to claim your solar tax credits. After you purchase qualifying equipment and have the equipment installed, you simply file (or have your accountant file) IRS form 5695. Your credits are automatically deducted from the amount you owe on your taxes or added to your refund due. If your credit is more than taxes due, you can also roll the credit over to offset your future tax obligation.
If you’ve been considering installing a solar power system for your home, it’s time to act. If you make your investment and get your equipment installed by December 31 of this year, you can save big money on your taxes while enjoying the long-term saving and independence that comes with having your home powered by the sun. What are you waiting for?