Federal Solar Tax Credit Extended at 30%

“When you purchase a solar photovoltaic (PV) system during the tax year, you are eligible for a Federal Solar Tax Credit that you can claim on your federal income taxes for a percentage of the cost of the system.

In 2021, the ITC provided a 26% tax credit for systems installed between 2020 through 2022. The ITC will now provide 30% for systems installed in tax years 2022 through 2032. So, when deciding whether to install solar panels, factor in a 26% to 30% discount.

It’s essential to note that you can only claim the credit once. If the taxes you owe that year are less than the credit you earned, your credit will roll over to the following year. Also, remember that the credit is a deduction, not a refund.”

“The Solar Investment Tax Credit has offered tax reduction incentives for homeowners who choose to “go solar.” On August 16, 2022, embracing residential solar energy became even more enticing when the Federal Government signed the Inflation Reduction Act of 2022 into law.

Among numerous climate-conscious consumer and industry incentives, the most impactful is the increase, expansion and extension of the Residential Clean Energy Credit—also known as the Solar Investment Tax Credit (ITC).

The ITC effectively raises the amount of credit you can apply against your income tax burden from 26% to 30%. Instead of decreasing next year as scheduled, it’s been extended until 2032 before it reduces again. The tax credit is also retroactive to solar energy systems installed during the 2022 tax year. Here’s what you need to know about the ITC and how to make it work for you.”
from Forbes
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