How Does The Solar Tax Credit Work?
2 months ago
Taking advantage of the solar tax credit is a great reason to make the switch to solar energy this year!
Are you ready to start the process of going solar? The first step is to schedule an appointment with us for a solar panel estimate. During this process, you can ask questions and our team can determine if your home can easily support a solar energy system.
Federal Solar Tax Credit
The federal solar investment tax credit is one of the biggest incentives for most homeowners to make the switch to a solar energy system. In 2022 it was extended through 2032, so if you have your solar energy system installed before the end of 2032, the tax credit is 30% of your cost.
This 30% credit is applied to the entire cost of the solar system (labor, permitting, installation, equipment, etc.). In 2032 the tax credit amount will decrease to 26%.
How The Federal Solar Tax Credit Saves You Money
Simply put, this tax credit will lower your federal taxes. For example, if you spend $20,000 on your solar panel system, your federal solar tax credit would be $6,000.
If your credit is more than you owe in federal taxes, the remainder can be carried forward into the following year.
Indiana Tax Exemptions
While the state of Indiana doesn’t offer any solar rebates, there is one additional state-based tax exemption you can take advantage of this year.
If you install a solar energy system in your home, you are completely exempt from all property taxes associated with the increase in your home’s value due to making the switch to solar.
How To Qualify For The Tax Credit
This credit is available to all United States taxpayers. It doesn’t matter what your income level is and you can qualify for it if you itemize your taxes or if you take the standard deduction when you file.
However, this tax credit is only available to taxpayers who purchase a solar energy system. If you lease one, you can’t take advantage of this financial incentive.
Whether you pay for your entire solar energy system upfront or finance the cost, you can claim this credit for the full cost of the system.
Advanced Solar Is Here To Help
Now is the perfect time to go solar! Have questions about how switching to solar energy works for your home and what to expect when you work with us?
Our expert solar installers are available to answer your questions and help you find the best solar energy solution for your home or business.