Solar Tax Credit
If you’ve considered going solar, you’ve probably heard about the solar investment tax credit. There is a lot to learn about this great opportunity, including whether it will be beneficial for you! The solar tax credit, also known as the Investment Tax Credit (ITC) is available to both residential and commercial investors. The rates are ever changing, but fortunately, have been extended for the meantime. However, the extension is predicted to drop drastically in following years, so now is the best time to invest if you’re planning to take advantage of the tax credit.
Am I eligible?
The Federal Solar Tax Credit rates have been extended for the year 2021 to 26%. These rates are subject to change in the future. To qualify for the solar investment tax credit, you must:
How does the tax credit work?
It’s important to understand that a tax credit is not the same as a rebate.The balance owed in federal taxes is offset by applying the tax credit. If you do not owe enough in taxes for the current year, the tax credit can be applied to what is owed the following year.There is no such thing as a solar tax rebate, meaning you will not receive a check in the mail.
How do I claim my tax credit?
The process of claiming your tax credit is fairly simple. If preparing yourself, you will use the IRS form 5965 when filing your yearly tax return. Be sure to either share with your accountant that you have invested in solar or follow EnergySage’s guide if you’re preparing your own taxes in order to claim your tax credit. One piece of advice, make sure you obtain a copy of the invoice from Big Dog Solar to give to your accountant.
Hopefully this has answered your solar tax credit questions and helped get you on your way to going solar. Let us know how we can help you take advantage of the great opportunities that are available! For more information, feel free to reach out! Big Dog is here to help!
*Big Dog Solar is not certified in tax preparation