Filing For Your Solar Investment Tax Credit – Feb 2015
It’s getting to be that time of the year again — tax time, that is. As all new rooftop solar homeowners should know who purchased a system in 2014, they are eligible for a Federal Investment Tax Credit of 30% of the cost of their system. This tax credit is good for both solar PV and solar thermal (hot water) systems. The solar ITC applies to the owner of the system, which is the homeowner for purchased systems or the leasing/PPA company for systems that are owned by third parties.
The solar ITC is arguably the most important incentive to solar customers, but it goes to zero on January 1, 2017. Claiming the credit on your tax return is surprisingly easy. All you need is the complete set of invoices from your installer that summarizes your qualified costs for your system — then you can reduce your 2014 tax bill by 30% of those total costs. For example, if your purchase price for the system installed in 2014 was $20,000, you get to reduce your 2014 tax bill by $6,000.
So Listen Up to this week’s Energy Show as we go over the rules that apply to this tax credit, and fill out IRS Form #5695. And finally, although solar guys like me understand the basics of the 30% Solar ITC, please remember to get advice from your tax professional before filing.