| Solar Heating Tax Credit up until December 31, 2016 Solar Water Heating Federal Tax Credit Solar Heating can save you up to 30% on your taxes in addition to year-round savings on your energy bill. | ||
On February 17, 2009, President Obama signed a stimulus bill (The American Recovery and Reinvestment Act of 2009) that made some significant changes to the energy efficiency tax credits.
At least half of the energy generated by the “qualifying property” must come from the sun. Homeowners may only claim spending on the solar water heating system property, not the entire water heating system of the household. Solar Heating Tax Credits are not limited to the $1,500.00 Tax Credit Cap. The credit is not available for expenses for swimming pools or hot tubs. The water must be used in the dwelling. The system must be certified by the Solar Rating and Certification Corporation (SRCC). Improvements made up until December 31, 2016 can be claimed on your taxes (filed by April 15, 2017) — use IRS Tax Form 5695 (2009 version). For more information on the bill, check out the U.S. Department of Energy website. What is a tax credit? A Solar Water Heating Tax Credit is not received when you buy the product, like an instant rebate. A Tax Credit on Solar Water Heating System is claimed on your federal income tax form at the end of the year. The credit then increases the tax refund you receive or decreases the amount paid in. Tax credits vs. tax deductions. In general, a tax credit is more valuable than a similar tax deduction. A tax credit reduces the tax you pay, dollar-for-dollar. Tax deductions – such as those for home mortgages and charitable giving, for example – lower your taxable income. If you are in the 30 percent tax bracket, your income tax is reduced by 30 percent of the value of a tax deduction. But a tax credit reduces your federal income tax by 100 percent of the amount of the credit. For more information on Federal Tax Credits for Energy Efficiency, click here.
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Thursday, May 17, 2012
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