Am I eligible to claim the solar investment tax credit?
You might be eligible for the solar investment tax credit if you meet all of the following criteria:
What is the difference between a tax credit and a tax rebate?
It’s important to understand that this is a tax credit and not a rebate. Tax credits offset the balance of tax due to the government (therefore, if you owe no tax, there is nothing to offset and you can’t take advantage of it). Tax rebates are payable to the taxpayer even if they owe no tax. While most people qualify for the solar panel tax credit, there are some who do not. Anyone who does not owe federal income taxes will not be able to benefit from the solar tax credit. And, if you’re on a fixed income, retired, or only worked part of the year, you may not owe enough energy taxes to take full advantage of this solar tax credit.
If you do owe sufficient federal taxes the year that you finance or purchase your system, then the credit can be applied to pay off the taxes owed. If you already paid that taxes by withholding it from your paycheck, the federal government will apply the tax credit to a tax refund. This refund can be used to pay down the balance on a loan. It’s important to note that the tax credit be carried forward one year, which means that you can use any remainder from this year as a credit towards next year’s taxes.
•Internal Revenue Service, located at 1111 Constitution Avenue, N.W., Washington, DC 20224, and phone at (800) 829-1040.
Disclaimer: This webpage provides an overview and does not constitute professional tax advice or other professional financial guidance. It should not be used as the only source of information when making purchasing decisions, investment decisions, or tax decisions, or when executing other binding agreements.