How the Solar Tax Credit Works

[@jroysdon]

26% ITC has been extended for two more years, to cover 2021 - 2022. Then the 22% ITC in 2023.

[@drumr72]

Trump did this that means. Shouldn't liberals be jumping off bridges? Enjoy your marxist socialism coming. Ugh. This country is full of tards.

[@dc5duben96]

this video answered alot of my questions, thanks! i do have 1 more question tho, i know the itc rate is 22% for 2021 and next year 2022 it drops to 10%. now if i purchase my solar in 2021 but file my taxes in 2022, do i get the 22% credit becuz i purchased the system in 2021 or do i only get the 10% because im fileing in 2022❔❔

[@FitzgeraldCharles]

Yes. You are claiming the tax credit for the year the system got installed. The 10% you speak off is for commercial and not residential.

[@Jzarecta]

I heard there is a solar tax credit marketplace where you can trade this like a security. Where can I find information about this?

[@VigilAndyYT]

If I owed 5000$ and paid 4500$. Can I use the 6000$ on the 5000$ and get my 4500$ back. Or can i only use it on the 500$ i owe and have 5500$ credit roll over to next year?

[@Peterpet400]

Why no one can reply this ?

[@TheAdenAlise]

@@Peterpet400 Yes if you paid $4500 over the year and applied for the credit you would get the $4500 you paid back. $500 would go to what's left that you owe and the last $1,000 will be rolled over to next year. On the opposite end if you are retired and do not pay taxes you will have the tax credit but will never see anything from it.

[@TennesseeFrank]

What if you never own income tax, what if you always get a refund on your Federal Taxes? How do you use the ITC then??

[@dublued]

Let's define some terms so that we can discuss them properly: Taxes owed: This is the amount you owe the IRS, regardless of what your withholding status or amount is Withholding: You withhold money from every paycheck to pay towards the taxes you owe Refund: This is something you get if you over withheld. For example, you owed $10,000 in taxes, and your withholding was $15,000. You will then get a refund for $5000.0 So here is an example: You owe $10,000 in taxes. You withheld $15,000. Your solar credit was $7,000. First, your solar credit will be applied to the taxes you owe. Therefore, your tax liability will now be $3,000 ($10,000 - $7,000). That $3,000 tax liability will now be paid by the money you withheld ($15,000). This leaves you with a balance of $12,000 ($15,000 - $3,000). This is going to be the amount of your refund for that year.

[@PeaceFinder12]

@@dublued Thank for explaining but can the credit be used to make the purchase of the solar panel system less? That is to say, I won't get the credit after I do my taxes, instead the credit is used to pay off part of the solar system...?

[@dublued]

@@PeaceFinder12 It all depends on the solar company you are dealing with. If you are financing your solar project, many banks will give you a 0% interest, 0 payments loan for the amount of the tax credit. That gives you enough time to file your taxes and receive your refund. Once you receive your refund, you can pay the bank the full sum of that loan, which should be the exact same amount as the tax credit. So essentially you are using the tax credit to make the price lower, you just don't do it time of purchase, but after about a year when you've received your credit.

[@mejhon6592]

@@dublued okay, what I understood people who just owe money to the IRS, they are the only ones who qualify to get the federal solar tax credit? And people who have solar panels but they don't owe to IRS they dont get the federal solar tax credit? Do I am right or no? Example: A customer pay $35,000 for solar panels. He is credit is $9,100, He don't owe money to IRS he get pay with the form w-2. That is meant that he would'nt not get federal solar tax credit? In another words he is going to pay the full amount $35,000 for his solar panel? The credit didnt apply to him. Do I am right? Only people who owe to the money IRS gets federal solar tax credit?

[@Energy.Theory]

Me Jhon if you are in a position where your tax obligation is low (disability or social security) then you should lease not purchase. You will never utilize the full amount of the tax credit. If you are in a position where you pay taxes because you are working you can use the credit to lower what you owe and then receive money back. In other words once you handle what you owe the IRS if you have left over with holdings the difference will be credited back. So for example. You make 30,000 and you owe 4,000 and your withholdings were set high so they withheld 5,500 . You just bought a solar system for 20,000 your credit for that is 5,200. 4,000- the ITC of 5,200 = -1200. Now you can receive the money you initially were going to use to pay taxes because the ITC amount covered your debt.

[@Jzarecta]

Wonder if biden double this benefit or made some extensions regarding the benefit. I am sure there should be something relevant to this on his 'green bill'.

[@nescafeshorts1900]

If you don't owe money at the end of the year or the government owes you...you will not get this tax credit. If you owe money it will only take what you owe down to "0"; the extra credit is carried forward to the next year...this is not the kind of credit where the government cuts you a check. So if you think your going to get a check for 30% of what you paid for your solar; you have been mislead and need to speak to an attorney.

[@rayamanelly]

So if I'm married filling joint and combined we earn more than 240k and have paid atleast 50k in federal taxes through payroll holdings; and let's say my solar system allows me to claim 30% of a #43,000 dollar job or $13,000. Typical we only see around $3000-$6000 back per year. Are you saying that the solar tax credit wouldnt increase my refund if applied?

[@JpOcDenver]

D R I : DIVE RIGHT IN Correct. Your withholding needs to be reduced to take advantage of the tax credit. Essentially: pay less federal income taxes all year long, but still not owe at the end of the year because the tax credit covers what you would have owed.

[@q-q-qiah]

D R I : DIVE RIGHT IN what you should do. If you are w2 and they ask you how many people you claim. If you usually claim 1 and your with usually claims one and you usually get back $3000. What you should do is each claim 2 or 3. This will mean about $13k less will be taken out of your paychecks than it should, so when tax time comes you’ll owe $13k but your solar deduction will discharge or minus that $13k.... AND BAMMMM $13000 in your pocket. Does that make sense?

[@chaoshastme]

@@q-q-qiah Thats what I thought but I had heard differently from some places. This makes more sense. Still beneficial but you have to work it.