As you can see, it is very important to look closely at your tax liability to understand how this credit may fit into your finances.<\/p>\n\n\n\n

Second, you\u2019ll only get cash back if the taxes you already paid for the year are greater than what you owe.<\/p>\n\n\n\n

For example, let\u2019s say you paid $5,460 in federal income taxes over the course of the year. As noted above, a $21,000 solar power project would offer that exact value of tax credit. After verifying that your solar tax credit is worth $5,460 via the tax forms above, you\u2019ll get back exactly that amount after filing your taxes.<\/p>\n\n\n\n

However, if you happen to have paid $2,730 this year in federal income tax, and another $2,730 next year \u2013 you\u2019ll get $2,730 back each year. The 2020 IRS form above allows taxpayers to carry unused portions of the tax credit into their 2021 return.<\/p>\n\n\n\n

Third, the tax credit will fall from 26% to 22% in 2023. After 2023, the residential tax credit ends. For business customers, it continues indefinitely at 10%.<\/p>\n\n\n\n