May not get solar credit if earnings too low
One of the big selling points for installing a solar energy system in your house is the 30 percent federal tax credit that comes with it.
But be careful: If you don’t make enough money to pay federal taxes, the solar credit will not apply.
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That’s exactly what happened to a retired couple living on Social Security and a modest pension in the Anaheim area who got a rude awakening after spending about $30,000 to have a solar system installed in their home.
“So the total 30 percent (for the solar tax credit) was something like $9,000 and they ended up with nothing because they didn’t owe anything (to the Internal Revenue Service),” said Roger Gresham, president of American Business Services, who prepared the couple’s taxes.
“I hear too many of these commercials talking about this 30 percent tax credit and a lot of people think when they hear that, that it’s going to generate a nice refund and it — in a lot of cases — doesn’t,” Gresham said.
And there is a large number of Americans who don’t pay any federal taxes. According to a report by the Tax Policy Center, 45.3 percent of tax filers do not have any 2015 federal individual income tax liability.
“That’s definitely a problem if you’re retired or a low-income person,” said Ryan Willemsen, founder and chief executive of Solar to the People, a San Diego startup that offers price quotes. “It’s a huge issue and it’s causing a lot of confusion.”
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