Solar power tax credits are still available

We’re in the midst of an Arctic cold spell here in Central Texas. Yes, it’s nothing compared to many other parts of the country, but it’s ours.

Frozen jug waterfall_Jan 7 2017_IMG_3685 (2)

Three days of sub-freezing temperatures have made it clear that the hubby and I are no longer equipped to live in colder climes! We’re just glad our backyard waterfall was able to deal with a bit of frost.

This cold snap got me thinking about how glad I am that we were able to make some easy energy efficiency upgrades to our home and get a federal tax credit for them.

Most energy credits out cold: The ones we used are no longer available. They were among a whole slew of energy-related tax credits that expired at the end of 2016.

It’s a bit too early to see if they will be reconsidered by Congress as a separate bill, rolled into a new extenders package, dropped altogether or included in promised (or threatened, depending on your point of view) tax reform.

But a tax credit more generally associated with warmer weather is still in the tax code through 2021.

The solar energy systems tax credit provides a tax break of up to 30 percent of the system’s cost. It’s available at this level through Dec. 31, 2019.

After that, the credit phases out. It drops to 26 percent for tax year 2020 and to 22 percent in its final year.

There is some good news, though. Since solar systems are more expensive, there’s no cap on the eligible solar components to which it applies.

It also applies to upgrades made on existing homes, as well as those under construction. And you can claim it for systems installed in your primary residence and a second home.

Qualifying houses: OK, exactly what will the Internal Revenue Service accept as a solar energy system in connection with this tax credit claim? Solar water heaters and solar panels.

For a solar water heater to qualify, at least half of the energy generated by the heating system must come from the sun. The system also must be certified by the Solar Rating and Certification Corporation (SRCC) or a comparable entity endorsed by the government of the state in which the system is installed.

Solar panels or photovoltaic systems must provide electricity for the residence and meet applicable fire and electrical code requirements.

The credit for each is claimed on IRS Form 5695.

You can find more details at the Energy Star and Energy.gov websites.

Now, I’m going to hunker down under my quilt and wait for the return of some sunshine and heating that the weather forecasters swear is coming back this way next week.

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Source: http://feedproxy.google.com/~r/DontMessWithTaxes/~3/zOjiwhEVCdE/solar-tax-credits-avaiilable.html

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