National Roofing

National Solar Products

FAQ's

We have provided this information for general guidance only. All information is believed to be accurate at the time of publication, but is in no way a guarantee of completeness, accuracy, or timeliness. This does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind nor should it be construed as such. Prior to making any decision or taking any action based on this information, you should consult a qualified professional adviser to whom you have provided all of the facts applicable to your particular situation or question. None of the tax information in this publication is intended to be used nor can it be used by any taxpayer, for the purpose of avoiding penalties that may be imposed on the taxpayer.

What federal tax credits are available for solar panels?
There is a federal tax credit available for up to 30% of the system’s cost. Expenditures include labor costs for onsite preparation, system installing, and wiring to interconnect the system to the home. Example: If a solar panel system costs you $24,000 with all eligible expenses, your maximum federal tax credit amount would be $7,200 or 30%.

Is there a maximum federal tax credit amount for eligible systems?
No. With the signing of the American Recovery and Reinvestment Act of 2009, the maximum credit amount of $2,000 was lifted. Currently, there is no maximum credit amount on either solar panels or solar water heating systems.

What incentives are available at the state level?
Solar incentives are available in many states but
differ in each. State incentives range from tax
credits or rebates, to property tax exemptions and
utility rate discounts. Tax credits and rebates can
be as much as 50% of the system’s cost. See the
table below for a summary of incentives currently
available in your state. Specific details on available
state incentives can be found by visiting the
website www.dsireusa.org.

What if the tax credit exceeds your tax liability?
If a tax credit exceeds your tax liability, that additional amount can usually be carried forward to the succeeding taxable year. Example: You paid $24,000 for a solar panel system. Your maximum tax credit amount is $7,200 or 30% of the system’s $24,000 cost. If your tax liability is $5,000, you can only claim a maximum of $5,000 on your 2009 taxes. The additional $2,200 tax credit can usually be claimed on the following year’s taxes.

Is a tax credit the same as a tax deduction?
No. A tax credit is a dollar-for-dollar reduction in what the taxpayer owes. That means that a tax- payer who owes $8,000 in income taxes and who receives an $8,000 tax credit, would pay nothing.