Under current tax law, the federal government allows 1040 filers to deduct 30% of the costs of installing a solar energy system, with no cap on the amount you can spend. However, these energy credits start to decrease after 2019. In 2020, you will only get a credit of 26% of your costs. In 2021, this drops to 22%. After 2021, there is no credit for residential installations. If you were on the fence about when to install solar panels, the tax benefits are maximized in 2019.
This credit is only applicable if you have solar energy systems installed in your home. It does not apply to homeowners who rent a solar system or for individuals that elect to buy “solar credits” from their energy company.
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Clergy Financial Resources serves as a resource for clients to help analyze the complexity of clergy tax law, church payroll & HR issues. Our professionals are committed to helping clients stay informed about tax news, developments and trends in various specialty areas.
This article is intended to provide readers with guidance in tax matters. The article does not constitute, and should not be treated as professional advice regarding the use of any particular tax technique. Every effort has been made to assure the accuracy of the information. Clergy Financial Resources and the author do not assume responsibility for any individual’s reliance upon the information provided in the article. Readers should independently verify all information before applying it to a particular fact situation, and should independently determine the impact of any particular tax planning technique. If you are seeking legal advice, you are encouraged to consult an attorney.
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