The 2008 version of the form 5695 only grants you a Tax Credit in that it reduces your Tax Liability on line 53 of your US1040 and there was a $2000 cap in the solar category. You could get $2000 or 30%, whichever was less.

For 2009, I’ve found websites (www.EnergyStar.gov) and solar installers who claim that the $2000 limitation has been removed and now you can get the full 30% of the system cost. But I haven’t found anyone who can tell me if this is going to be a (1) Tax Deduction (reduction in Adjusted Gross Income and therefore only reduces the income on which we are taxed, meaning I only get 30% of the 30% back if I’m in the highest tax bracket), (2) a Tax Credit (only good against existing tax liabilty and then it would either be carried backward, forward, or is not carryable to another year) or (3) a Refundable Tax Credit (where if you have more credit, then you have tax liability, you can still get the excess back in cash when you file).

EnergyStar.gov claims the 2009 form 5695 won’t be available until the end of 2009. Please point me to a resource that shows whether the 2009 filing rules will fall into option 1, 2 or 3. Thanks

–Drew–
SouthEastern PA
Master’s Commission

You get 30% back including installation costs for heating and cooling equipment, but only product costs for windows, insulation, and other parts of the building “shell.”