If you already installed a solar power system, then you have probably already benefited from the Consolidated Appropriations Act. Signed in December 2015, the legislation extended the expiration date for a 30% federal tax credit – also known as the investment tax credit (ITC) – for installing PV and solar thermal technologies. If you have not yet installed solar, this credit offers a huge financial incentive to do so!
The ITC applies to both residential and commercial systems, and there is no cap on its value. The residential tax credit applies for a system serving a dwelling, located in the U.S., that is owned and used as a residence by the taxpayer. However, it does not have to be the taxpayer’s principal residence – a second or vacation home is eligible. Expenditures only qualify for the tax credit once the installation is completed and purchased in full. If the installation is for a new home, the “placed in service” date is the date of occupancy by the homeowner.
The costs for which a solar adopter can expect to receive the credit include labor for on-site preparation, assembly or original system installation, and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds the taxpayer’s tax liability in a given year, the excess amount may be carried forward to the succeeding taxable year.
Here is the overview of benefits:
- 30% for systems placed in service by 12/31/2019
- 26% for systems placed in service after 12/31/2019 and before 01/01/2021
- 22% for systems placed in service after 12/31/2020 through 12/31/2021
- Permanent 10% for commercial systems placed in service after 12/31/2021
Of course, we’d be happy to answer any of your questions – just give us a call at (941) 359-3700!