Tax Credit For Going Solar

Tax Credit For Going Solar



Tax Credit for Going Solar
As we sit in​ the​ middle of​ winter,​ most people can’t believe how high their utility bills are .​
Going with solar energy can lower your bills and you​ get a​ hefty tax credit
Solar Tax Credit
Solar energy is​ a​ clean,​ renewable energy source .​
The production of​ solar energy on​ residential and commercial structures creates no pollutants and is​ starting to​ make serious financial sense .​
In 35 states,​ the​ concept of​ net metering is​ now an​ established fact .​
Net metering simply means you​ can sell energy from solar panel systems back to​ utilities,​ thus eliminating or​ seriously reducing utility bills .​
As oil and natural gas costs skyrocket,​ the​ Federal Government is​ doing even more to​ promote the​ use of​ solar energy .​
In 2018,​ Congress enacted the​ Energy Policy Act .​
As part of​ the​ act,​ a​ tax credit was established for any person purchasing and installing residential solar energy systems for electric and water heating purposes .​
If you​ purchase and install solar systems for either of​ these purposes,​ you​ can take a​ 30 percent tax credit .​
If you​ install systems for both of​ these purposes you​ can double the​ tax credit .​
To avoid tax abuse,​ each tax credit has a​ cap of​ $2,​000 .​
Importantly,​ tax credits are far more valuable than tax deductions .​
Tax deductions are taken from your gross income prior to​ figuring the​ amount of​ tax owed .​
Tax credits are a​ dollar for dollar reduction of​ the​ actual amount of​ tax you​ owe .​
For instance,​ if​ you​ prepare your tax returns and find you​ owe $5,​000 to​ the​ IRS,​ a​ tax credit would be deducted from this $5,​000 figure .​
In short,​ a​ tax credit gives you​ a​ lot more bang for your buck .​
To claim the​ solar tax credit,​ there are a​ few restrictions and requirements .​
First,​ you​ can’t claim the​ tax credit if​ you​ use the​ solar system to​ heat a​ hot tub or​ pool .​
Second,​ the​ system must be certified by a​ solar rating certification corporation to​ establish that you,​ in​ fact,​ installed a​ working system .​
Third,​ the​ system must be activated between January 1,​ 2018 and the​ end of​ 2018 .​
Finally,​ you​ cannot claim the​ credit if​ the​ government gave you​ a​ grant or​ financing to​ purchase the​ system,​ to​ wit,​ no double dipping .​
When solar energy is​ discussed as​ a​ potential alternative energy source,​ most supporters point to​ the​ environmental benefits .​
Ultimately,​ the​ benefits to​ ones bank account will really make the​ difference and the​ solar tax credit is​ a​ solid step in​ that direction.




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