A homeowner can save a significant amount of money when they decide that they want to install a solar power system. With federal, state, and county tax rebates, solar installers can currently receive 26% in credits that they can apply towards the payback of their system. Applying for these credits when you file your taxes can require specific forms with the IRS. Here are the easiest ways to handle the paperwork.
Federal Taxes
Tax credits at a federal level can leave you with a 26% deduction on your federal taxes for the year of installation. This works if you own a commercial or residential building that has solar panels installed within 2020. You can apply for the deal throughout this year as long as your system started construction within the calendar year. Credits available for 2021 fall to just 10%. To apply for this system, you will need to have generated electricity with your panels before the application, own the solar panels, and not lease them and then complete the IRS form 5695 as you are doing your taxes.
If you own a rental property, completing one of these forms can be difficult. The residential solar credit is technically only available for the part of the residence that you are using. If you live in the home, you can claim 50% of the tax credit if you share with one tenant. If you live in the home for 3 months of the year and rent a different home, you can split up these costs between each property you had solar panels installed in throughout this year.
Statewide incentives also require a proper application. The best way to manage your statewide application is to work with a local solar installation company. They can help you navigate the requirements, help you find out more about the latest incentives at this level, and learn about the process of installation and qualification for your commercial or residential system.
This post was written by Daniel Massaad, owner and expert solar technician at Energy Solutions Direct! ESD is one of the premier Tampa solar companies! Our licensed and certified contractors are masters of their craft; with years of experience servicing the great Tampa Bay area and beyond, the choice is simple. ESD excels at offering you the best in solar value!