The contents of this blog are for informational purposes only and should not be relied upon for tax or accounting advice.
If you’re looking for ways to save on solar, you don’t want to miss out on the federal solar tax credit. The solar tax credit, formally known as the solar Investment Tax Credit (ITC), reduces your federal tax liability by a percentage of your solar installation costs.
The solar tax credit was recently increased by the Inflation Reduction Act and is now worth 30% of your solar installation costs. The new 30% Inflation Reduction Act solar tax credit will be available for solar installations completed from 2022-2032.
It’s easy to claim the solar tax credit, and you can do so when you file your annual tax return. Here’s how to claim the tax credit for your residential solar panel installation:
- Step One: Save all receipts associated with your solar installation.
- Step Two: Complete IRS Form 5695 and attach it to your annual tax return.
- Step Three: Add your solar tax credit information to your typical IRS Form 1040.
Commercial solar installations are also eligible for the 30% federal solar tax credit. To claim the credit for a commercial solar project, follow these steps:
- Step One: Save all receipts associated with your solar installation.
- Step Two: Complete IRS Form 3468.
- Step Three: Attach IRS Form 3468 to your annual tax return.
The Inflation Reduction Act (IRA) was signed into law in August 2022. If you completed your solar installation earlier in the year, you can still claim the 30% tax credit—the IRA made the increased solar energy tax credit retroactive for solar projects completed in 2022.
To claim the solar tax credit on your 2022 tax return, you must have completed your solar installation and placed your solar panel system in service by December 31, 2022.
To claim the solar tax credit on your 2023 tax return, you must complete your solar installation and place your solar panel system in service by December 31, 2023.
The Inflation Reduction Act solar panel tax credit makes it easier to manage the upfront cost of a solar installation, so you can start saving money on your electric bills faster. If you want to claim the solar tax credit for your Texas solar installation, Texas Engineered Solar can help. We are a local solar company near you in San Antonio that knows Texas solar rebates and incentives inside and out. We also offer excellent zero-down, low-interest financing and can help make solar work within your budget.
