- Federal Tax Credit:
30% of cost with no upper limit
December 31, 2016
Existing homes & new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify. The tax credit for energy efficiency is available for improvements made to a home that you own and use as your "principal residence." This is the home where you live most of the time. A temporary absence due to special circumstances, such as illness, education, business, military service, or vacation will not change your principal residence.
The home must be in the United States. It can include a house, houseboat, mobile home, cooperative apartment, condominium, and a manufactured home.
At least half of the energy generated by the solar heater ("qualifying property") must come from the sun. (All of the power generated by a Zonbak panel comes from the sun).
Home owners may only claim spending on the solar heating system property, not the entire heating system of the household.
The system must be certified by the Solar Rating and Certification Corporation (SRCC).
The heat must be used in the dwelling.
The credit is not available for expenses for swimming pools or hot tubs.
Tax credits vs. tax deductions:
Tax deductions versus tax credits is a confusing concept. In general, a tax credit is always worth more than a tax deduction because it is a "credit" from the taxes you pay after all your deductions. Still confused? (who isn't with any tax form?).
Here are two examples with a $100,000 income (after all other deductions) of either a credit or deduction of $3,000