Hey, guess what? We’re comfortably in the middle of tax season. In addition to that, Memorial Day weekend is three-plus months away.
If you’re anything like a lot of us, tax season is kind of a pain for you, because, well, that’s just how it’s always been. And taxes are not going away. As Ben Franklin (a very wise man), once said, “…in this world nothing can be said to be certain, except death and taxes.”
So it is that every January brings forth a fresh new collective wave of cold sweat, muttering, and frustrations. What exactly can be written off? What tax credits can I get? Is it legal to borrow a child?
Well, we here at Sun Solar want you to know that we feel your pain. And, while we can’t make taxes go away, what we can do is let you know about a sizable tax credit that’s available to you for the next several years…the solar Investment Tax Credit, or ITC.
Some quick facts about ITC from the Solar Energy Industries Association (www.seia.org):
- The ITC is a 30 percent tax credit for solar systems on residential (under Section 25D) and commercial (under Section 48) properties.
- The residential and commercial solar ITC has helped annual solar installation grow by over 1,600 percent since the ITC was implemented in 2006 – a compound annual growth rate of 76 percent.
- The existence of the ITC through 2021 provides market certainty for companies to develop long-term investments that drive competition and technological innovation, which in turn, lowers costs for consumers.
It sounds great, right? That’s because it is. But because we believe in transparency, we’re going to go ahead and further break this down by telling you how it works.
First, and most basic, a tax credit is a dollar-for-dollar reduction in the income taxes that a person or company would otherwise have to pay the federal government. The ITC in this case is based on the total investment in solar property.
Both the residential and commercial ITC are equal to 30 percent of the basis that is invested in eligible property (that has also commenced construction) through the year 2019.
After 2019, the ITC then steps down to 26 percent in 2020, and down again to 22 percent in 2021.
After 2021, the residential credit will drop to zero, while the commercial and utility credit will drop to a permanent 10 percent.
What this really means is that we see our customers achieve big savings on solar arrays and energy efficiency upgrades due to these tax credit savings. An investment that once seemed to only be for the wealthy has now truly become affordable for every homeowner, and we believe every person has a right to know what energy options are available to them.
However, given the gravity of this information and individual differences in tax needs, we always recommend to our customers that they discuss a potential solar installation with their accountant to ensure that it is a wise investment for them.
The great news is that, in the meantime, we can give you a free consultation so that you’re armed with numbers when you give your accountant a call. And while we can’t ease the pain of death, taxes, OR accountant phone calls, we can offer you a shoulder to cry on…as well as that giant tax credit.
The post Why You Should Take Advantage of the 30% Federal Tax Credit appeared first on Sun Solar.