Hello, I’m Judy Kristen with Beckley and Associates.
Our team is dedicated to helping you focus on what matters most, and today, we’re going to talk about a topic that matters a lot – the Residential Clean Energy Property Credit.
What is the Residential Clean Energy Property Credit?
The Residential Clean Energy Property Credit is a tax credit that can help homeowners save money on the cost of installing clean energy equipment.
This credit applies to items like solar panels, solar water heaters, and fuel cell properties.
Currently, the distinction is set at 30% of the cost of these items and applies to your current tax return.
Changes to the Credit:
Some changes are coming to the credit, so it’s essential to act now if you’re considering switching to clean energy. Starting in tax year 2022, the credit will be limited to $500 lifetime, which means if you’re planning on making the switch, now is the time to do it.
However, there’s still some good news! For tax years after 2022, the credit will be up to $1,200 annually. That’s a significant saving and makes switching to clean energy an even smarter choice.
When Does the Credit Apply?
The credit applies to property that is placed in service on or after December 31st, 2021, and before January 1st, 2035. This means that if you act now, you can take advantage of the credit and start saving big on your energy bills.
How to Claim The Credit:
To claim the Residential Clean Energy Property Credit, you’ll need to report the cost of the clean energy equipment on your tax return. You can do this using IRS Form 5695, Residential Energy Credits.
You’ll also need to make sure that the equipment meets certain energy efficiency requirements, which can be found on the Department of Energy’s website.
Benefits of the Residential Clean Energy Property Credit:
There are many benefits to switching to clean energy and taking advantage of the Residential Clean Energy Property Credit. Here are just a few:
- Save money: You can save money on your energy bills by installing clean energy equipment. Also, with the tax credit, you can save even more.
- Help the environment: Clean energy is better for the environment than traditional energy sources. By making the switch, you’ll be doing your part to reduce your carbon footprint and help protect the planet.
- Increase your home’s value: Homes with clean energy equipment installed are often more attractive to buyers. By making the switch, you could increase your home’s value and make it more marketable in the future.
Conclusion:
In conclusion, the Residential Clean Energy Property Credit is a great way to save money and help the environment. With changes to the credit coming in 2022, now is the time to act if you’re thinking about making the switch to clean energy.
At Beckley and Associates, we’re here to help. If you have any questions about how to claim the credit, or if you need assistance with your taxes, please don’t hesitate to contact us. We’re always here to help you make the most of your finances and save money.