Image

How to Claim Your 30% Solar Tax Credit

If you are thinking about going solar or adding panels to your home or commercial solar system, there has never been a better time!

Passed in summer 2022, the Inflation Reduction Act act includes thousands of dollars in tax credits and rebates for people who install solar panels.

  • The Investment Tax Credit (ITC) now grants homeowners and businesses a tax deduction equal to 30% of the total cost of a solar energy system through the end of 2032.
  • The 30% credit will also be retroactively applied to homeowners who have installed a solar system since the beginning of 2022.
  • The tax credit will begin to decrease after 2032, to 26% in 2033 and 22% in 2034.

    • As you can see, there are plenty of benefits to claiming your residential ITC—but applying for the credit requires research and planning. Claiming your federal tax credit boils down to a few simple steps:

    Image
    1. Determine if you’re eligible for the credit

    It’s important to ensure you have enough tax appetite to use the federal tax credit against your total taxes. Consult with your tax advisor to determine if the federal ITC can apply to you.

    Image
    2. Complete IRS Form 5695

    This form can be found at IRS.gov. It will validate your qualification for the credit..

    Image
    3. Add renewable energy credit information to your typical form 1040

    Be sure to mention your renewable energy credit into your regular tax form. 

    Image
    4. Compare your solar quotes to maximize savings 

    Getting at least 3 total solar quotes is recommended to ensure you're getting the best deal for your solar energy needs.

    Am I eligible for the solar tax credit?

    Image
    • You’ll need to own your solar energy system, rather than leasing it. Leasing a solar energy system means that the third-party owner gets the solar tax credit.
    • You may still be eligible even if the solar energy system is not your primary residence, just as long as you own the property and live in it for a part of the year.
    • If your federal tax liability is lower than your ITC savings, you can still carry over remaining credits to the following year!

    Don’t miss out on this opportunity! Connect with our team and your tax advisor to learn more about claiming your federal solar tax credit. You could qualify for up to $10,000-plus in tax breaks and rebates for clean energy technology. Click the "Free Solar Proposal" button at the top of this page and fill out the form to get started with your local solar experts at A.M. Sun Solar.