The federal solar tax credit offers huge savings on PV installation. Claim it, and you can reduce your income tax liability by 30 percent of your photovoltaic system costs – and the incentive has no cap on value.
But if you want to take advantage of the full 30 percent federal investment tax credit (ITC), you’ll need to act fast. Put off your PV installation for too much longer, and you won’t save as much with the solar tax credit.
Thanks to a recent change in the ITC rules, you have a little more time to qualify for the full 30 percent solar tax incentive. The requirement to have your photovoltaic system in service by the end of the year is gone – now, you simply need to begin your PV installation by December 31, 2019.
What happens if you miss the deadline? You can still claim the federal solar incentive, but your tax credit will be smaller:
Begin your project between January 1, 2020 and December 31, 2020, and you’ll be eligible for a 26 percent credit. Start your PV installation in 2021, and you can claim 22 percent of your investment costs on your federal income taxes. If you wait until 2022, you won’t be able to benefit from the solar ITC.
To the IRS, beginning your PV installation project involves more than researching your options and scheduling a consultation with a professional photovoltaic contractor.
To claim the 30 percent solar tax incentive, you need to meet one of the following by the end of 2019:
In addition, you must own your photovoltaic system. You can pay with cash or obtain financing, but leasing isn’t an option. If you choose a solar lease, you won’t be able claim the federal solar ITC – the leasing company will get the savings.
To claim the solar ITC on your federal income taxes, you’ll need to complete IRS Form 5965 and send it in. The document is relatively easy to understand, and the IRS provides helpful instructions.
Despite this, you may not want to handle the paperwork on your own. The IRS isn’t all that forgiving of mistakes, and any error could prevent you from qualifying for the full 30 percent solar tax incentive. Working with an accountant or tax professional could be in your best interests.
However, if you only need assistance with the federal ITC form, turn to the Intermountain Wind & Solar team.
We’re not tax experts by any means, but we’re well-acquainted with the federal solar investment tax credit and can help you fill out the paperwork properly. We can also answer your questions about financial incentives for going solar in Utah, Idaho, Nevada, Oregon or Wyoming.
For a no-cost, no-obligation consultation to discuss PV installation – and to begin your photovoltaic power project soon enough to take advantage of the full 30 percent federal solar tax credit – contact Intermountain Wind & Solar today.
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