Solar power can cost less than you thought. Are you installing solar panels and equipment? There’s tax relief for that! The ENERGY STAR program allows individuals and businesses to get a tax credit for solar projects. CAM Solar wants you to use this program for your commercial and residential solar panel projects.
Solar power uses a naturally renewable resource without polluting using coal or other fossil fuels. Any way you look at it, adding solar structures to your home is a terrific idea. The federal government agrees, offering you some help to pay for it. The Environmental Protection Agency (EPA) and the Department of Energy (DOE) together fund the excellent ENERGY STAR program. ENERGY STAR incentivizes individuals to make the initial investment in solar structure by rebating or tax crediting for these improvements on personal income tax returns. For more info on business applications of the Federal tax credit, click here for a handy fact sheet. If you want to know more about Texas incentives, visit the Texas state and city incentives right here.
SOLAR REBATES FOR YOUR HOME
Below is a brief run-down of how the Federal tax credit works. This is just the basic info; you will want to check with an accountant or tax attorney for more in-depth application of these credits.
You can get up to 30 percent of the cost of your energy system as a tax credit if you install it before the end of the year. This will let you take the amount off of your tax payment instead of using it as a deduction from any income that needs to be taxed. Also, you can claim as many credits as you want. While you can claim up to 30% as a tax credit, you can claim on multiple structures that have solar installed.
You can get the credit applied to any structure or property that you have. This could apply to a vacation home, a residential home, a commercial building, and more. The only items that cannot have the credit applied to are rental structures. You must live in the property for a certain amount of time to claim it.
The exception is if you reside in the house for part of the year, then use it as an income-generating rental for another part of the year. You’ll have to reduce the credit for either your vacation home, rental or timeshare. It depends on the amount of time you do not live there.
If you live in the home for three months a year, you cannot claim more than 25% of the credit. If the system costs $10,000, the 30 percent credit would be $3000, and you could request a quarter of that, or $750.
INDIVIDUAL FILING FOR SOLAR TAX INCENTIVES
To get the solar credits you deserve, you need to fill out IRS Form 5695 along with your tax return. On Form 5695, you will add up all of your credits and then combine the results with the IRS Form 1040.
In the event you have received more credit than the amount of income tax you owe, you cannot get more money from the IRS. For instance, if you owe $3500 on a $2700 tax bill, you cannot get $800 from the federal government. According to the ENERGY STAR program, what you can do is get the credit to carry over and apply it to next year’s income taxes.
You’ve made an excellent choice considering solar energy. CAM Solar can assist you with every step of the process. Our well-informed sales staff can also help you in navigating the many financial incentives available to individuals and businesses who complete solar installations.