It Still Pays to Go Green
If you've been thinking about adding solar panels to your house or buying an electric vehicle, it could do wonders for your tax refund. The 2017 tax reforms put some new limits on green tax credits, but most of the tax breaks are still in effect through 2025.
The Residential Renewable Energy Tax Credit, for example, allows you to claim a tax credit up to 30 percent of the total cost of a home renewable energy project that's up and running by the end of 2019. Qualifying upgrades include installing solar panels or a solar water heater, small wind turbines or even geothermal heat pumps. After 2019, the value of the tax break starts to go down, so that improvements placed by in service in 2020 get 26 percent, and ones in 2021 get 22 percent [sources: TurboTax, Perez].
The same is true if you buy a plug-in electric vehicle like a Nissan Leaf or a Chevrolet Bolt. For most of these cars, the IRS will give you a tax credit of up to $7,500. For more popular vehicles like the Tesla models and the Toyota Prius Prime, the credit is less, but it's still worth snapping up the tax breaks while they last [source: Edmunds].
Both the renewable energy credit and the electric vehicle credits are nonrefundable credits, meaning that they are subtracted dollar-for-dollar from your tax bill, but they won't result in a tax refund by themselves. That said, these green credits combined with other refundable tax credits can significantly boost your refund.