I'm sure you've heard of the federal solar investment tax credit. Sometimes referred to as the "Federal ITC" or just "ITC", which stands for "Investment Tax Credit". This incentive is HUGE, and is as simple as it sounds... you get 30% of the cost of your solar or geothermal project back in the form of a tax credit. Yes there's more to it, we'll explain further..
We are NOT accountants and do not pretend to be. Although we do know a lot, we strongly recommend going over your situation with a CPA to see if you could utilize the tax credit.
So what qualifies for the federal tax credit? The following could qualify:
- Solar installation (all materials, labor, financing, etc)
- Geothermal installation (all materials, labor, financing, etc)
- Roof replacement **IF needed to install solar
- Main electric panel upgrade **IF needed to install solar
- EV charger installation **Up to $1,000
- Small wind energy installation (all materials, labor, financing, etc)
We can install everything above other than wind energy, see which services you would qualify for here.
Example time! You spend $50,000 on any of the above items, which means you'd get a $15,000 tax credit. Awesome! What does that mean though?
If you are paying $15,000 in federal income taxes, you'd then owe nothing. OR if you owe $5,000 each year, you'd pay no federal income taxes for 3 years (3 x 5,000 = 15,000). The tax credit does not expire once you receive it. Which means you have it until it's used in full.
What's most important here is understanding your federal income situation, your accountant is your best bet to see how your income would affect tax credit eligibility. For the most part, if you're retired and living on a small income, the tax credit won't help you much. Comparatively, if you're actively working and making over $45,000 a year, the tax credit will benefit you.
Eligibility is based on who is on the title of your home, so if there's multiple people, you have multiple incomes to choose from.
If you have any questions that we can answer, feel free to send us an email at info@virginiarenewables.com or schedule a 10 minute call and we can go over whatever you want!
Watch our video about the Federal Tax Credit!
*We are not tax experts. We always advise our clients to meet with their preferred tax professional to learn how the tax credit would benefit them.*
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