30% Federal Tax Credit
In 2008, by a vote of 263 to 171, the U.S. House of Representatives passed historic legislation that extended the 30-percent federal investment tax credit for both residential and commercial solar installations for 8 years, until 2016.
What does this mean for the Solar Industry?
This bill ensures that America has a long-term goal of achieving energy independence including solar is going to be a big contributor. With this comes the creation of hundreds of thousands of jobs that will provide families and businesses with clean, affordable energy. CNC Solar is excited to be on the leading edge of the industry allowing for families and business to utilize this credit.
What does a Tax Credit mean?
A Tax Credit is an amount that can be deducted from the total amount of federal taxes that you owe. This is different than a tax write off, because a tax write off only reduces your taxable income.
- For Solar (PV), you can receive a Federal Tax Credit for 30% of the total project cost with no limit.
- If you cannot use the whole Tax Credit in that year, you can roll it forward for 20 years.
- Projects put in service before December 31st, 2016 are eligible for this incentive.
- Existing homes & new construction qualify. Both principal residences and second homes qualify.
How is a 30% Tax Credit is actually worth more than the credit amount?
The Following example is based on a $100,000 project with a 30% Tax Credit of $30,000. It demonstrates how a $30,000 tax credit is equivalent to earning $40,000 more in Gross Income.
|With Tax Credit||No Tax Credit|
|Adjusted Gross Income||$120,000||$160,000|
|Net Income After Tax||$120,000||$120,000|