If you are considering purchasing a Commercial or Residential Solar System, then don't forget to factor in the Federal Solar Tax Credit.
The tax credit is for the entire cost of your solar system, which includes solar equipment, freight, installation, permits, consulting fees, and battery storage.
Credit is only applicable if you purchase your Solar System outright, either with a cash purchase or solar loan.
While the Investment Tax Credit (ITC) is a great incentive, time is running out. The Federal Solar Tax Credit gives you a dollar-for-dollar reduction against your federal income tax, which is a great incentive to Go Solar. However, the Investment Tax Credit (ITC) started out as a 30% credit in 2016 and continued through 2019, gradually stepping-down to 26% in 2020, and finally phases out for residential permanently in 2021 with a final 22% credit.
NOTE: Commercial Solar Tax Credit continues in 2022 with a permanent 10% credit.
You can claim the credit in the same year you complete the installation. Make sure you keep all receipts, the more you spend on your solar installation the larger your tax credit.
A quick note. This is not a refund, it is a credit that reduces any federal taxes owed. You can’t take a credit larger than the amount of taxes you owe, because the ITC is a “non-refundable” tax credit. You can, however, claim the credit over more than one year, and carry any leftover amount forward to the next year.
Disclaimer:** As in all tax matters, the taxpayer is advised to consult their tax professional. Sun Coast Roofing & Solar assumes no liability regarding the homeowner’s ability to obtain any tax credit/s.