Don't Miss the Boat on Solar Tax Credits!

IR5695 2018_Page_1.jpg

Did you know in 2019 there's a 30% Solar Federal Investment Tax Credit?

 

The US Federal Government offers a solar energy residential tax credit applicable to your first/second home, which can be your boat!  As long as there is a head, galley, and bunk aboard and it is registered in the United States, your vessel qualifies.  

Who Can Take The Credit?  "You may be able to take the credit if you made energy saving improvements to your home located in the United States in 2018.   A home is where you lived in 2018 and can include a house, houseboat, mobile home, cooperative apartment, condominium....The home doesn't have to be your main home."

This tax credit, extended to December 31, 2019, is a 30% credit on the total system cost of all qualified expenditures: this includes solar panels, charge controllers, inverters, wiring, batteries, parts and labor.  There is no maximum limit for equipment placed in service after 2008.  This credit can be retroactive,  as long as the solar system was placed into service after January 1, 2006.  

 

(Disclaimer: As always, please consult with your tax advisor or accountant for the most up to date tax info for your situation.)

 

 

 

 

 

 

 

 

 

 

 

 

Its easy to file!  Step 1: Complete  IRS Form 5695.  Be sure to check you use the latest version of the form which is updated January/February each year (note: the above forms are for 2018)   www.irs.gov/pub/irs-pdf/f5695.pdf 

For instructions on how to complete Form 5695 download the instructions here www.irs.gov/pub/irs-pdf/i5695.pdf

Step 2: Once IRS Form 5695 is completed it gives a total that is then entered as a line item on IRS Form 1040.  The two forms are then attached together and filed at the same time as your IRS Form 1040.   https://www.irs.gov/pub/irs-pdf/f1040.pdf

If you can't use all of the credit because of the tax liability limit(that is, line 14 is less than line 13), you can carry the unused portion of the credit to 2019.

Federal Investment Tax Credit (ITC) Phase Out Dates and Details

Tax Credit on total system cost, placed in service:

                   Jan. 1, 2006 - Dec. 31, 2008 = 30% tax credit (capped at $2,000)

Jan. 1, 2009 - Dec. 31, 2019 = 30% tax credit (no cap)

Jan. 1, 2020 - Dec. 31, 2020 = 26% tax credit (no cap)

Jan. 1, 2021 - Dec. 31, 2021 = 22% tax credit (no cap)

After Jan. 1, 2022 - You missed the boat!

Here is a link to the Department of Energy's website that provides a description of the Federal ITC:

http://energy.gov/savings/residential-renewable-energy-tax-credit

Solar Tax Credits by State

Various states have their own solar energy tax incentives that may also apply to the purchase of a SunPower® flexible solar panel system for your boat.  Depending on what state your boat is registered, you may be eligible for added tax incentives or rebates!  The Database of State Incentives for Renewables & Efficiency (DSIRE) website has a wealth of information and is worth checking.  We have compiled a current list of states with relevant 2018 solar energy tax incentives and rebates below:

 

Arizona

 

Hawaii

  • Solar and Wind Energy Credit—Income tax credit of 35% of the cost of equipment and installation of solar panels, with a limit of $5,000.

 

Idaho

  • Residential Alternative Energy Tax Deduction—Income tax deduction of 40% of the cost of the solar energy system for the year in which the system was installed, plus a 20% deduction of the costs each year for three years after. The maximum deduction per year is $5,000.

 

Iowa

 

Louisiana

 

Maryland

 

Montana

New Hampshire

 

New Jersey

 

New York

 

Oregon

 

South Carolina

 

Utah

 

Vermont

 

Virginia

 

Washington

 

West Virginia

 

Wisconsin

Step 1: IRS Form 5695
Step 2: IRS Form 1040
f1040 2018_Page_1.jpg