- To be eligible for the 30% tax credit you must be currently paying federal income taxes.
- The solar tax credit is tied to your federal income tax burden — if you usually owe income taxes, it will reduce the amount you pay. If you usually receive a refund, it will increase the amount of your refund. The tax credit can zero out what you pay for a year, but it is not refundable.
- If you’re on a fixed income (i.e. veteran pension, social security), be sure to review your tax returns from last year to see how much tax you paid overall.
- If you do not have enough tax liability to claim the full credit in one year, you can roll over the remaining credits into the next year.
Who qualifies for the tax credit?
How do I take the tax credit?
You will claim the tax credit when you file your yearly federal tax return. When it’s time to file your taxes, you will need to complete IRS Form 5695 “Residential Energy Credit” to validate your eligibility for the tax credit and include this information when you file your regular income tax return (IRS Form 1040).
Please note: Since we’re solar folks and not tax preparers, we always suggest consulting with your tax advisor for guidance about your specific tax obligations.
Curious about your tax credit eligibility? We’d be happy to put you in touch with a tax professional that’s familiar with this section of tax law to help you determine your eligibility.