Modern homeowners can't get enough of solar panels. Installing panels on your roof gives you a decent supply of solar energy so you can live sustainably and save money on your utility bills. Another major perk of installing solar panels is the credit available for anyone who pays federal taxes.
How many times can you claim solar tax credits in Nashville? This guide explains how the solar tax credit works so you can make an informed decision before moving forward with solar panel installation in Nashville.
As an incentive to turn to reusable energy sources, Congress passed a bill that allows homeowners nationwide to receive a tax credit for installing solar panels. This credit will impact the amount that you owe according to your tax returns.
For example, say your tax return shows your income at $50,000, but you have a credit available worth $5,000. Having this credit doesn't serve as a deduction, so your taxable income is now $45,000. Instead, it goes toward your tax liability for that year.
Say you owe $3,500 for your federal tax liability. Part of your $5,000 credit will cover this year's liability, while the remainder carries over to the following year. The current federal tax credit for homeowners with solar panel systems stands at 30% of the installation cost.
Are you eligible for a federal solar tax credit? According to the U.S. Department of Energy, homeowners can earn the federal tax credit as long as they meet the following criteria:
How many times can you claim solar tax credits on your tax return? Once you've claimed the credit, you can't do it again for that same property. You may earn a separate credit if you install panels in another residence, though the total amount you can claim depends on the amount of time you live in that property.
Although you can only claim this solar tax credit once, you may be eligible for other money-saving benefits. Certain states have their own tax incentives for homeowners who install solar panels. It's possible for you to claim credit on both federal and state taxes.
The price of solar installation can run high, but homeowners will enjoy clean, renewable energy for decades to come. On average, you can also save thousands in energy costs each year by going solar.
Before installing solar panels, it's essential that you know the answer to basic questions like "How many times can you claim solar tax credits?" To learn more about this topic or learn how long solar panels last, reach out to the experts at Dragon Scale Roofing & Solar. Contact their specialists today to discuss the benefits and process of installing solar panels on your Nashville home.