It Pays to Be Green…Especially During Tax Season!
Although the government recently issued an extension to file your taxes due to COVID-19, this time of year is traditionally filled with endless emails to accountants and piles of receipts. However, it’s no myth that going green helps put a little more green back in your pocket. While year-round savings are pretty tangible in terms of energy costs and bills, there are additional tax benefits you may qualify to receive as well!
Tax Incentives
Whisper Valley homeowners are eligible for tax incentives now available for both solar and geothermal systems. Homeowners can receive a tax credit for their home’s solar photovoltaic (PV system), as well as a tax credit on the above-ground geothermal equipment in the home. This includes the ground-source heat pump (including installation) that drives the geothermal heating and cooling system in each home.
In 2020, the current federal tax incentive (ITC) allows homeowners to currently write off 26% of the value of both systems, which could total up to $6,000-$10,000* depending on the size of the equipment installed in the home. If the credit is more than the homeowner owes in taxes in the first year, the remaining tax credit can be used to reduce taxes for the following year. These tax incentives change year-to-year, so if you’re looking and able, take advantage of these savings in 2020!
In addition to the great tax savings, geothermal heating and cooling and solar power provide incredible benefits to the environment—something we ALL benefit from no matter where we fall on the green spectrum.
Vehicle Credits
Many of us have seen the electric car stations at area grocery stores and shopping areas, but this is another opportunity to save on your taxes as well as keep our air clean!
If you bought a plug-in electric vehicle, you could be eligible for the Qualified Plug-In Electric Drive Motor Vehicle Credit, which applies to new electric vehicles bought after Dec. 31, 2009. This credit will begin to phase out when at least 200,000 qualifying vehicles manufactured by each automaker have been sold in the United States – another incentive to be on the early-adopter side of the green movement! In order to qualify the vehicle must:
- Have been purchased new
- Have been made by an eligible manufacturer under the Clean Air Act
- Have at least four wheels
- Be able to drive on public streets and highways
- Have a weight rating of less than 14,000 pounds
- Have an electric motor that uses a rechargeable battery to generate at least 5 kilowatt hours of capacity
Tax credits for both of these range from $2,500 to $7,500 based on the vehicle’s battery capacity and the car’s overall size. For more information on tax credits and an index of qualifying manufacturers visit the IRS website.
Remember to consult your tax preparer to ensure accuracy when filing your tax return.
Extended Income Tax Deadline: July 15, 2020
For more information on building a home in Whisper Valley, please click here and set up a virtual tour with one of our onsite sales counselors today!
*Total system value depends on size of home and system, and varies for each home