How to Switch to Solar Power?
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The federal solar tax credit allows residents of Live Oak, TX to save even more on solar energy systems. Now is the best time to make the switch to cleaner energy since these tax credits will decrease annually through 2022. Read on to learn more about these fantastic incentives and how to apply for them.
What Are Solar Tax Credits?
Owners of solar panel systems are eligible for solar tax credits. Residents who choose to lease their systems or currently have a Power Purchase Agreement (PPA) do not qualify for this incentive. If you purchase your panels, you may then receive a credit worth 26% of the cost of installation. You can then apply these credits to your annual taxes.
The rate of 26% only lasts through the end of 2020. Beginning in 2021, the rate will decrease periodically as depicted by the following timetable:
- 2021 – 22%
- 2022 – 10% permanently
Residents of Live Oak will get the most out of solar energy if they make the switch soon! We want our customers to reap all the benefits of clean energy, including these savings.
How To Apply Tax Credits
If you already own a solar panel system, you may be wondering what the next steps entail. First, we recommend checking that you qualify for this tax credit. Make sure all these boxes are checked before you move on to the next step:
- Installed your system in 2020
- Generate electricity with your panels
- Own your solar panels
If you said yes to all these conditions, then you’re ready file for your tax credits! Keep in mind that you take the amount directly off your tax payment, rather than as a deduction from your taxable income.
When you’re ready to claim your credit, you are going to need to file IRS Form 5695 when doing your tax returns. You will be instructed to calculate your credit on the form.
Rental properties can get a little tricky, but you can claim the residential solar credit if you live at the house for part of the year. To make up for time not there, you will have to reduce this credit. For example, if you live at your rental home for three months of the year, you will be able to claim 25% of the credit .
As an example, if your system costs $10,000 and the full credit is $2,600, you can claim 25% of this amount which totals $650.
If you need any assistance claiming your federal tax credits, need help researching statewide incentives or simply have questions about your savings, the solar specialists at Momentum Solar are happy to help. We’re experts in finding our customers the best deals while providing high quality systems that produce clean, price-protected electricity.
Momentum Solar is a full-service solar energy company that handles everything from initial assessment all the way through installation and energization. Visit www.momentumsolar.com or call 1(888)-MOMENTUM for assistance filing for tax credits or for more information about our services.
Find Out if Switching to Solar is Right for You
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