Tax Season Tips: What to Know about the Solar Tax Credit

It’s tax season again, and this year it PAYS to go solar!

We all know solar can save you money on your energy bills, but there are a few ways to save even more when you make the switch. Rebates, tax credits, and deductions provide extra benefits on top of all the other savings a solar system. If you're considering solar for your home or business, don’t miss out on the federal Solar Investment Tax credit (ITC).
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If you installed a solar energy system in 2018, follow the tips below to claim the ITC. This federal tax credit is a great way to get extra savings out of your solar panels. The ITC lets home and business owners subtract 30 percent of the cost of installing their solar energy system from their federal taxes. 
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If you didn’t go solar this year, be sure to act fast to take full advantage of this credit! You must install your system by December 31, 2019 to receive the full 30 percent credit on next year’s taxes.

STEP BY STEP GUIDE:
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To claim the 30% solar tax credit, you simply complete a Form 5695 and add the results of this to your main tax return for the year in which the solar panel installation is completed. Form 5695 calculates tax credits for a variety of qualified residential energy improvements.
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Form 5695 Instructions: 3 steps to claim the solar tax credit

1. Make sure you qualify for the ITC before filling out the form. As long as you own the system on your commercial or residential property, you should qualify. The credit does not apply to those who lease their system.
2. Complete IRS Form 5965 to validate your qualification for renewable energy credits.
   1.  Your qualified solar electric property costs will go in Line 1.
   2. Insert any additional energy eligible additions on Line 2 through Line 4. 
   3. Add all costs up and insert total to Line 5.
   4. Multiply Line 5 by 30 percent to get the total for your Investment Tax Credit.
3. Add your renewable energy credit information to your typical form 1040.

Contact your tax expert with any questions or for any other tax-related issues. Information can be obtained from your solar provider if you don’t already know the cost of the panels after all rebates have been deducted.

The ITC was implemented in 2005 and has been a successful tax policy that is helping to create a powerful solar energy industry. If you are interested in installing your solar system this year to take full advantage of the ITC, contact SunHarvest Solar today and start saving tomorrow!

Learn more about the Solar Tax Credit and other exemptions available to Arizona residents.