Solar Technology Tax Credits Still Available for 2020
December 1, 2020
By: HintonBurdick
Residential Energy Efficient Property Credit
- This tax credit is 30 percent of the cost of alternative energy equipment installed on or in your home.
- Qualified equipment includes solar hot water heaters and solar electric equipment placed into service on or after January 1, 2006, and on or before December 31, 2021.
- There is no maximum credit for systems placed in service after 2008.
- The tax credit does not apply to solar water-heating property for swimming pools or hot tubs.
- If your credit is more than the tax you owe, you can carry forward the unused portion of this credit to next year’s tax return.
- At least half the energy used to heat the dwelling’s water must be from solar in order for the solar water-heating property expenditures to be eligible.
- Solar water-heating equipment must be certified for performance by the Solar Rating Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the property is installed.
- The home must be in the U.S. It does not have to be your main home.
- Use Form 5695, Residential Energy Credits, to claim the credit.
Equipment costs such as assembling or installing original systems, on-site labor costs, and costs related to wiring or piping solar technology systems are considered final when the installation is complete. For a new home, the placed-in-service date is the occupancy date.
The maximum allowable credit varies by the type of technology:
Solar-electric property
- 30% for systems placed in service by 12/31/2019
- 26% for systems placed in service after 12/31/2019 and before 01/01/2021
- 22% for systems placed in service after 12/31/2020 and before 01/01/2022
Solar water-heating property
- 30% for systems placed in service by 12/31/2019
- 26% for systems placed in service after 12/31/2019 and before 01/01/2021
- 22% for systems placed in service after 12/31/2020 and before 01/01/2022
If you would like more information about this topic please contact the office today.
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