General tax credit information
What is the difference between a tax deduction and a tax credit?
A tax deduction is subtracted from income before total tax liability is computed. On the other hand, a tax credit is subtracted directly from the total tax due or added to the expected tax refund. For example, if you are paid $665 for a Solatube 160 ISn with installation, you would earn a $200, or 30%, tax credit, which you would add to your federal tax refund or subtract from the amount you owe.
When were the tax credits established and when do they expire?
Tax credits for residential solar installations were initially created under the Energy Policy Act of 2005, and have been extended several times under other additional acts. In 2015, the credits were extended once again. The 30% tax credit for residential installations extends until the end 2019, and then begins a step down until 2023, after which it will phase out completely.
What do I need in order to claim the tax credit??
You’ll need your receipt for purchase and installation, a Manufacturer’s certification (see above), and IRS Form 5695.
Are there local incentives for my county and/or city?
Many local utilities provide financial incentives for energy-efficient products. To find out if rebates or incentives are available in your area, visit the ENERGY STAR rebate finder at www.energystar.gov. For additional information, please visit your state energy office website for specific state tax information or go to http://www.dsireusa.org/ to view the database of State Incentives for Renewables and Efficiency.
Does a product with an ENERGY STAR rating automatically qualify for federal tax credits?
Prior to December 31, 2013, all products with the ENERGY STAR label were eligible for 10 % federal tax credits because of their ability to operate efficiently and lower energy bills. After this date, there may be some ENERGY STAR-rated products that do not qualify for federal tax credits. To find out for sure, it’s recommended you visit www.irs.gov or consult a tax professional for advice.
*Daylight Maine, a premier certified installer of Solatube International makes no warranty as to the qualification of the products for federal tax credits if there are changes in requirements or applicable law after such date.
Daylight Maine, a premier certified installer of Solatube International, Inc. is not a tax advisor. Taxpayers claiming a tax credit should consult a tax professional with any questions. Daylight Maine, a premier certified installer of Solatube International is not responsible or liable for the taxpayer’s ability to receive tax credits. This document is not intended to constitute legal or tax advice. More comprehensive information will be made available by the IRS. The user maintains the full and complete responsibility to comply with all codes, laws and regulations applicable to the safe and proper use, handling and installation of the product and should consult with a professional for all construction- and design-related questions. The information contained herein is believed to be accurate as of the time of preparation. However, Daylight Maine, a premier certified installer of Solatube International makes no warranty as to the accuracy of this information.