More and more countries in the world are promoting the use of solar power. Not only are they making solar projects more accessible to people, but they also provide reimbursements for solar projects.
These reimbursements mostly come as tax credits. In most countries, this is filed through IRS Form 5695. If you’re someone who has a residential solar project or is thinking of getting one, you should know how to file for a solar tax credit.
What is IRS Form 5695?
IRS Form 5695 also known as Residential Energy Credits is used to reduce your tax bill for some of the costs you incur to make energy-efficient improvements to your home. This includes the utility of renewable energy sources such as solar power.
There are kinds of residential energy credits: the nonbusiness energy property credit and the residential energy efficient property credit. Both of these residential energy credits can cut your residential tax by up to 26% annually.
Who can qualify for Residential Energy Credit?
Any residential property can qualify for the residential energy credit. Whether it’s your principal residence, vacation house, city condo, or apartment, as long as you did an energy improvement project on the property, then you can file the IRS Form 5695.
What are the requirements in filing for Residential Energy Credit?
Here are the requirements that you should have to file the IRS Form 5695:
- Proof of purchase or proof of billing on your solar installation
- IRS Form 1040 or Individual Income Tax Return from the previous year
- IRS Form 5695 from the previous year (not applicable for first-time applicants)
Note that while there are lots of expenses included in your solar project apart from solar panels and generators, these expenses should be duly documented through receipts or proof of billing. Providing a summarized list of expenses from a legitimate solar project provider can further expedite the application process.
Go Solar Today 