Are you considering adding an alternative energy system in your home? If so, the Residential Energy Efficient Property Credit provides for a lucrative federal tax credit to help offset some of the cost.
Qualified energy saving property eligible for the credit include the following:
- Qualified solar electric energy
- Qualified solar water heating property (excluding swimming pool or hot tub equipment)
- Qualified fuel cell property
- Qualified small wind energy
- Qualified geothermal heat pump
- Qualified biomass fuel
In order to qualify for the credit, these systems must be installed in your residence in the United States.
How much is the credit?
For property placed in service between 2021 and 2022, the credit is equal to 26% of your cost of the equipment. Property placed in service in 2023, will be eligible for a credit of 22% of your cost. No credit
is allowed for property placed in service after 2023.
There is an additional limit to the credit for qualified fuel cell property. The credit for this type of property is limited to $500 for each 0.5 kilowatt of capacity and is only available if the property is installed in your primary residence.
In addition to the federal credit, many state and local governments offer incentives.
ClarkSilva can walk you through the tax incentives available to you if you are considering an alternative energy system in your home. Contact us today for more information.