Federal Tax Credit for Solar Attic Fans Extended

Good news for anyone considering a solar attic fan for their home. The federal tax credit that makes it a much more affordable option has been extended. Originally set to step down to a lower percentage tax credit in 2021, the 26 percent rate of 2020 has been extended through 2022.

What is the Investment Tax Credit?
The investment tax credit, also referred to as ITC, allows you to apply a federal tax credit to your income taxes if you install a new solar energy unit on your home during the year. Depending on the year, you may experience different tax credits as the credit itself “steps down” to lesser credit amounts periodically.

Why the Solar Tax Credit is So Great for Consumers
They offer you a dollar-for-dollar reduction in your tax liability. This means that if you have a tax credit worth $300 then your total tax bill is reduced by $300. This makes the purchase much better than a tax deduction, which only serves to reduce your taxable income. It’s a good idea to work with a tax accountant who understands your individual financial and tax situation.

It is important to understand that only those who own their new solar systems qualify for the tax credit. If you lease your unit through a solar installer you will not qualify for the tax credit that allows you to roll over remaining tax credit amounts (assuming you are unable to claim the entire credit in a single year) as long as the tax credit remains in effect.

Details of the Investment Tax Credit Extension
Originally, the ITC was a 30 percent tax credit that stepped down to 26 percent in 2020. This is what the investment tax credit looks like thanks to the extension:

Years

Tax Credit Amount

Who Benefits

2016-2019

30 percent

New residential and commercial solar system owners.

2020-2022

26 percent

New residential and commercial solar system owners.

2023

22 percent

New residential and commercial solar system owners.

2024

10 percent

New commercial solar system owners.


How Do I Claim the Investment Tax Credit?
You claim the ITC when filing your annual federal income taxes.

If you have an accountant, you need to do the following steps to claim your deduction:

  1. Notify your accountant of the purchase.
  2. Provide your accountant with the manufacturer’s statement from your solar-powered system.

If you are filing your own taxes you will need to do the following steps to claim your deduction:

  1. Fill out IRS Form 5695 when filing your taxes.
  2. Keep a copy of the manufacturer’s statement for your solar-powered system.

It’s an easy way to save even more money on a system that will improve energy efficiency throughout your home.

Solar Attic Fans at Whole House Fan
Solar attic fans can help you keep your home cooler throughout the summer, improving comfort and energy efficiency. Whole House Fan offers a selection of systems to consider that will allow you to take advantage of these tax credits while making your home a more comfortable place for everyone.

The Investment Tax Credit makes those savings even sweeter by saving you money on your taxes for your efforts. Contact Whole House Fan today to learn more about the ways we can help you save.