The Federal Solar Tax Credit is an amazing incentive for going Solar. This incentive is helping grow the Solar Industry in the United States. Since the inception in 2006, America has seen a growth by more than 10,000%.
In 2015 the ITC was extended thanks to the overwhelming response and success of the program. Unfortunately, the tax credit will start decreasing in 2020. We have put together two of the top questions we get about the ITC incentive.
Answer: The program provides a percentage credit against a solar system purchase. If you are a W2 employee, the total annual withholding tax taken from your paycheck is eligible for the ITC.
Solar System Gross Cost: $30,000
26% ITC= $7,800
W2 withholding tax taken from paycheck for the year = $10,000.
You would receive back the entire $9,000 the following tax season.
Answer: Yes. The US government offered a 30% Investment Tax Credit for solar systems until the end of 2019. In 2020 the rate went to 26%. It was scheduled to go down to 22% in 2021 and then to 10% in 2022, however Congress extended the Federal Tax Credit in 2020 to remain at 26% for the years of 2021 and 2022.
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