While the landscape of federal tax credits for energy-efficient home improvements may have changed, there are still opportunities to save, particularly with solar energy systems. Here’s what you need to know:
- Solar Tax Credit Overview:
- Applies to solar hot water heaters and solar panels, covering 30% of the total cost, including installation.
- No dollar limit on the credit.
- Available for both existing and newly constructed homes in the United States.
- Must file IRS form 5695 with your taxes, along with manufacturer’s certification and receipts.
- Gradually reducing: remains at 30% through December 31, 2019, then decreases to 26% in 2020 and 22% in 2021.
- Solar Water Heater Tax Credit:
- Requires at least half of the energy generated to come from the sun.
- System must be certified by the Solar Rating and Certification Corporation (SRCC) or an equivalent entity.
- Credit not applicable for heating swimming pools or hot tubs; water must be used in the home.
- Solar Panel Tax Credit:
- Applies to panels providing electricity for a home and meeting fire and electrical code requirements.
- Expired Credits on Home Improvements:
- Tax credits for insulation materials, Energy Star exterior doors and windows, and qualifying roofs expired at the end of 2016.
- While these credits may not be currently available, the solar tax credit remains a viable option for eligible homeowners.
- Planning Ahead:
- Given the gradual reduction in solar tax credits, it’s advisable to consider investing sooner rather than later to maximize savings.
- Consult with a tax professional for comprehensive guidance on claiming credits and maximizing savings.
- Reach out to Experts in Your Home for assistance with energy-efficient home improvements and navigating available tax incentives.
In conclusion, while certain tax credits for home improvements may have expired, the solar tax credit continues to offer significant savings for eligible homeowners. By understanding the requirements and timelines associated with these credits, you can make informed decisions to enhance energy efficiency in your home while maximizing tax savings.