30% Solar Income Tax Credit: 6 Common Questions

Your question on the ITC may not be here, but we can answer them when you contact us.

Quick Note -if you think you’ll have a heavy tax year and you are still thinking about solar, CONTACT ME ASAP! Installation must be competed in the same calendar year you wish to apply your solar tax credit. Therefore, you’d need to be installed by Dec 31, 2023 to lessen your 2023 tax liability!

How much longer is the solar tax credit available?
As written in the Inflation Reduction Act of 2022 the Federal ITC will be increased from 26% to 30% in 2022 (retroactively giving solar customers who already went solar in 2022 a 30% tax credit). The 30% Federal ITC will be available to homeowners through December 31st, 2032before it steps down to 26% in 2033 and 22% in 2034.  (Remember solar is like real estate – it’s not about timing the market, it’s about Time In The Market!  The sooner you get solar, the more you’ll benefit.

Will I get a refund if the solar ITC exceeds my tax liability?
The ITC (Investment Tax Credit) is a non-refundable tax credit, which means you will not get the full value of the ITC if it exceeds your tax liability. However, you can carry over any unused amount of the solar tax credit to the next tax year, so over time you will get the full value even if it exceeds your tax liability in a single year.

Are batteries eligible for the 30% ITC as well?
YES. So are reroofing, shingle rejuvenation treatment and tree work when they are clearly an associated costs to go solar.

How long can the Residential ITC be carried forward?
 It’s up for debate. Some interpretations of past and current legislation say 5 years, 20 years, or as long as the ITC is available. We can say for certain that the credit can be rolled over as long as the ITC is in effect, which means until 2034 to claim their tax credit.

Can the solar tax credit be used against the alternative minimum tax?
Yes. The tax credit can be used against either the federal income tax or the alternative minimum tax credit.

How do I claim the solar tax credit?
Your CPA has the right federal tax form to submit with your taxes but if you complete and file your own taxes, just ask us to email it over. Just check with your CPA to ensure you are eligible for the ITC.

Get your questions answered. Call 434-249-1783 or email us at jcampa@moneywisesolar.com

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