Filing Taxes? Don’t Forget About Your Solar Incentives

Facts About Solar Energy
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Tax season is dreaded for most, but if you have solar you are in for some good news. Those that have purchased solar get some pretty large tax credits and incentives.

Commercial Solar Incentives

Acquiring solar for your business comes with some commercial specific solar incentives. Awareness of these financial enticements is the first step toward taking advantage of them.

Federal Solar Tax Credit

Federal tax credits cover a large chunk of your solar costs. The Business Energy Investment Tax Credit (ITC) is for all solar array sizes. These tax credits roll over from year to year allowing you to apply them to taxes you would have owed.

The ITC gives 30 percent of the cost of the solar array back to the owner. This credit, however, is set to decline each year until 2021. After this point, only commercial installations can take advantage of this tax credit.

This credit, however, will only be 10 percent instead of 30. This is one of the main reasons why companies are installing solar now.

Solar Depreciation: Modified Accelerated Cost Recovery System (MACRS)

One of the best cost recovery programs for businesses is MACRS. This program calculates how much your solar system would depreciate. You are then able to get this money back over 5 years.

If you get the ITC you will have to reduce your depreciation amount by half the tax credit you received. Some qualified systems can qualify for 100 percent bonus depreciation. Businesses that use depreciation to their advantage are able to save even more.

State Tax Credits

Some of the incentives available are dependent on the state you live in. You will need to check your state’s solar policy and incentives to know for sure what’s available.

Talking to a solar company in your area is another way to determine your state-specific options. Go Solar Group currently installs solar in Utah; San Antonio, Texas; and Sparks, Nevada.

Residential Solar Incentives

Obtaining solar for your home is a great way to invest your money. This is largely due to the incentives that are currently in place for residential solar.

Federal Solar Tax Credit

Like commercial solar residential solar can also get 30 percent off of the price with the ITC. Residential installations, however, will not receive any federal tax credits after 2021. It will also decrease to 26 percent in 2020 and 22 percent in 2021.

In order to get this credit, you need to fill out the 5695 form for the year your array was installed. This document will help you file the tax credit accurately.

These forms are normally released in February of the following year. Forms for systems installed in 2018, however, may take longer because of the partial government shutdown. Go Solar Group sends the correct form to their customers as soon as they are available.

Make sure you keep your 5695 form and your TC40 state and federal award letters. You will need these to verify you filed accurately if you are audited.

State Tax Credits

Each state is different. Like commercial solar state incentives for residential solar incentives are available at DESIRE.

Although solar companies will help you find the incentives for your area getting them is ultimately up to you. Make sure you don’t forget to file for your solar incentives.

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