With an essentially limitless supply, solar power represents one of the best forms of abundant energy on the planet. When you consider the benefits of solar power, such as sustainability and monetary savings, it is no surprise that many big companies like Apple and Amazon are installing solar panels. Solar energy can benefit all kinds of businesses.
Businesses that use solar power save on tax bills too. In order to encourage the move to more renewable and environmentally friendly energy sources, the U.S. government has offered HVAC Solar Tax Credits to both homeowners and commercial property owners for more than a decade.
If you are considering solar energy for your business, then you probably want to know about the tax credits available.
For the full 30% credit, you must have the system installed by December 31, 2019. You must be the owner of the solar panels, rather than leasing them. You must also own the commercial property or home where the panels are installed. If you are a renter at the property, you won't qualify for the tax credits.
Be sure to keep receipts for every aspect of your installation, as you will need them when the time comes to fill out your tax forms.
• Any money paid for parts, tools,installation equipment or any shipping costs associated with ordering these items is eligible. This would include any wiring, bolts, nuts, etc.
• You can claim all consulting fees.
• Any money paid to purchase a permit or associated with obtaining a permit.
• The money you pay to hire an engineer or electrician is also deductible.
• Installation labor costs, unless you do the installation yourself. You cannot deduct the cost of your own labor and receive a tax credit for that.
After meeting the requirements for 2019,you'll want to fill out IRS Form 5965 and send it in along with your other tax documents on or before April 15, 2020. You'll need to include all receipts for installation and parts costs. You will then add the total tax credit you will be claiming to your 1040 tax form.
There is no monetary limit to the total you can claim; it is 30% of the total cost of your system when installed in 2019.
The last year to claim the full 30% tax credits 2019. After this year, a gradual reduction in percentage will occur, with a26% deduction for both commercial and homeowners in 2020. In 2021, it will lower to a 22% deduction; after this year, homeowners will no longer receive any tax incentives. In 2022, only commercial solar installations will receive a credit of 10%.
Are you interested in taking advantage of the benefits of solar power? For the best in efficiency, cost-savings, and tax incentives, consider a hybrid climate system. It lets you take advantage of both geothermal and solar energy, for both residential and commercial use.
Solar energy is a cost-efficient,straightforward investment. Contact us today to learn more about our hybrid climate systems.