Federal Solar Investment Tax Credit 2017

Please note that the itc is different from a refund.

Federal solar investment tax credit 2017.

This investment tax credit program was always intended to be. The december 18 bill contained a 5 year solar tax credit extension which makes solar energy more affordable for all americans. Solar industry has grown by more than 10 000 creating hundreds of thousands of jobs and investing billions of dollars in the u s. The solar investment tax credit itc is one of the most important federal policy mechanisms to support the growth of solar energy in the united states.

Conversely a tax credit is an amount of money gross cost x 26 that may be used to offset your tax liability in the present or future. How to claim your solar tax credit. You calculate the credit on the form and then enter the result on your 1040. The 30 federal investment tax credit itc is among the most important incentives currently available for solar pv.

Homeowners solar companies and industry advocates alike were given a big christmas gift in 2015 when congress approved the 2016 federal spending bill and extended the solar panel tax credit. If you install solar panels before the end of 2020 you will receive a tax credit that is equal to 26 percent of the cost of your solar installation. The investment tax credit was ultimately meant to be an. Since the 1970s the federal government has given out a 10 percent tax credit to non oil and gas energy investments including solar.

Filing requirements for solar credits. Federal tax credit gross cost x 26. About form 4255 recapture of investment credit about form 8453 u s. The genius behind this is called the solar investment tax credit also known as the the itc and it s saved people thousands of dollars.

The federal solar tax credit also known as the solar investment tax credit or itc is the single most important solar incentive available in the united states. If you end up with a bigger credit than you have income tax due a 3 000 credit on a 2 500 tax bill for instance you can t use the credit to get money back from the irs. Individual income tax transmittal for an irs e file return page last reviewed or updated. These two guides one for homeowners and one on the commercial itc provide a concise yet thorough overview of the itc demystifying the tax code with intuitive explanations and examples answering frequently asked questions and explaining the process of claiming the itc.

To claim the credit you must file irs form 5695 as part of your tax return. Thanks to the popularity of the itc and its success in supporting the united states transition to a renewable energy economy congress has extended its expiration date multiple times. The solar investment tax credit dates all the way back 2005 stemming from the energy policy act of 2005. During this time the itc was born.

The history of the solar investment tax credit. The itc was originally established by the energy policy act of 2005 and was set to expire at the end of 2007.