If you’re thinking about installing a solar energy system at your home, you should consider applying for federal solar incentives as well.
There are many different tax credits and savings that will help lower the cost of the solar installation, so keep reading to find out more!
What Is Federal Solar Tax Credit?
The federal solar tax credit can be claimed when you file your federal income taxes. You’ll claim a percentage of the solar energy system. However, other types of renewable energy could be claimed as well for other incentives.
If you’re filing your 2021 taxes, that means that you’ll have to have installed it during 2021, even if you file the taxes in 2022. You’ll also need to have it placed at a home in the United States.
In general, if you installed one of these systems, you can get a 26% tax credit if you install it between 2020 and 2022. In 2023, the incentive will be 22%, and then it expires in 2024.
How It Works
When you want to claim that tax, you’ll need to be eligible for it. If you don’t have enough tax liability to claim your credits, you can roll them over to the next year when you do have more.
However, the tax credits will still need to be in effect.
You also need to own the system. That means that you can’t sign a lease with a solar installer; you need to own it yourself. There is also no income limit on how much you can claim, so any tax bracket is eligible.
You’ll need to prove that you’re eligible as well. You will need to have installed the system sometime between January 1, 2006, and before December 31, 2023.
You’ll need to have it at your primary or secondary residence. However, it would count if it was for a community solar project that wasn’t on your property.
You’ll also need to own it. You need to purchase it either with cash or through financing. If you leased it, it doesn’t count.
The materials and system also need to be new. You’ll need to determine how much to claim, so make sure you check out this link: https://blueravensolar.com/cost-of-solar/. This will give you a good idea of how much a solar system can cost.
Local Tax Credits
There are also local tax credits that you might be eligible for.
For example, if you live in South Carolina, they offer a 25% state tax credit on any installation. When you combine that with the federal incentive, you could save 51% of your solar system.
Discover More About Federal Solar Incentives for 2022
These are only a few things to know about the federal solar incentives for 2022, but there are many more factors to consider.
We know that trying to save on solar energy can be difficult sometimes, but we’re here to help you out.
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