Earlier this year, we wrote all about the brand-new 2022 Inflation Reduction Act, and its impact on solar energy consumers via tax incentives. As we’re gearing up for the new year, it’s time to do an updated breakdown of what this solar tax credit is, how it works, and why you should care about it.
Read on for everything you need to know about the solar tax credit in 2023!
In case you missed the news this summer, here’s a quick recap: the federal solar tax credit, previously set to cap out at 22% in 2023, was extended and increased to qualify homeowners for a 30% nonrefundable credit on their federal income taxes for the next decade. There’s no dollar limit on those expenses; you’re entitled to that 30% tax break whether you spend $20,000 or $100,000 on costs associated with a residential solar system.
Here’s how your income comes into play.
Let’s say you have $30k of a tax credit to use, but your yearly income isn’t high enough for you to receive it all in one lump sum. Don’t worry: the good news is you can spread it out over five years! Your solar tax credit does not have to all be taken in year one.
If you’re planning to go solar, consult a tax professional before making a decision.
Our MSS experts are always happy to provide information and insight, but we are not licensed tax advisors. Speaking to a tax professional will help guide you in the right direction for your venture into solar energy in 2023! The bottom line: if you don’t use a CPA, you might want to this year if you’re considering going solar. Then, we’re happy to take the reigns.
Patience is key.
It’s not breaking news that the government tends to move slowly. The process of receiving your solar tax credit doesn’t happen overnight, nor in just a month or two. This tax incentive runs through the federal government, which means it will often take longer than expected! Think of it this way: it’s not Amazon Prime for your refund.
At the end of the day, it’s your money–and it’s worth taking the time to do things the correct way. Trust the process, be patient, and the benefits will come back. Ready to go solar in 2023? MSS is here to help start the process!