It's Almost Tax Time! Claim Your Solar Tax Credit if You Went Solar in 2019.
The Federal Investment Tax Credit (ITC) is a great incentive to go solar because it gives a tax deduction equal to 30% of the cost of a solar energy system purchased in 2019, significantly reducing the federal tax burden. This percentage is decreasing in the future with the 2020 benefit diminishing to 26% and the 2021 benefit to 22%.
If you went solar in 2019, make sure you take advantage of this benefit!
Here’s how it works…
Determine if you are eligible for the Federal ITC.
Did you purchase your solar system (rather than leasing)?
Do you own the property and live in it for at least a portion of the year?
If you can answer YES to those questions, you should be eligible.*
Fill out the Proper Forms & File.
Fill out IRS Form 5695, “Residential Energy Credits.” Follow IRS Instructions for 5695 to complete this form. You’ll need to know the qualified solar electric property costs which is the total gross cost of your solar energy system, excluding cash rebates. You can find this number on your Contract or All Paid receipt dated 2019.
Include the final tabulation from that form as you complete IRS Form 1040. Follow IRS Instructions for 1040 to complete this form.
Keep your All Paid receipt from your solar purchase in your records in case of audit.
If your Federal Investment Tax Credit (as determined by IRS Form 5695) exceeds your 2019 tax liability, you can even claim the balance on your 2020 taxes! The same is true for 2018 solar customers. If you didn’t use the full ITC on your taxes last year, you can still claim the balance for your 2019 taxes.
* Check with your tax advisor before determining the best path for you. Tax codes can be complicated but we hope we can inform you of some important questions to ask as you file your taxes.