Tax time is almost here again! If you have taken the initiative and completed a solar installation to your home, there are some important solar tax credits you can claim for the 2018 federal income tax year.
The Residential Renewable Energy Tax Credit is a federal program administered by the IRS. The program is in effective until 12/31/2021. The program allows you to claim a rebate amount of 30% of the cost of your solar system.
What is covered by the Renewable Energy Tax Credit? You can claim a rebate on solar installation costs for solar water heat, heat pumps, fuel cells using renewable fuels and more. There is no maximum rebate for solar electric systems placed in service after 2008.
To be eligible to receive the tax credit, the dwelling unit must be located in the US, owned by the taxpayer, and used as a residence. (The home does not have to be the taxpayer’s principal residence.) There is a gradual step down in the allowable credit for solar-electric property, solar water-heating property, small wind-energy property, geothermal heat pumps, and fuel cell property as follows:
To claim this tax credit, you will need to complete IRS Form 5695 to Form 1040. You will then add the renewable energy credit information to the IRS form 1040. Here are the full IRS instructions for completing Form 5695.
There are many advantages to choosing solar for your home energy system. Solar is a clean and efficient source of energy. Systems with an installation date of no later than December 31 can claim 30% of the system cost as an Investment Tax Credit (ITC) for the 2018 tax year.
