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What You Need To Know About The Federal Solar Tax Credit

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There are plenty of solid reasons why it’s worth it to go solar: lowered energy costs, higher property value, and protection against power outages, just to name a few. But did you know that installing solar can also qualify you for a tax credit?

Read on to learn more about how tax credits work in tandem with solar power systems.

First, what is the federal solar tax credit?

The federal solar tax credit is a tax credit able to be claimed on your federal income taxes for a portion of the cost of your solar power system. Installing a solar system on your home can qualify you for a credit of up to 30% of your total cost, thanks to a bill passed by Congress in December 2020. How much you’re able to claim depends on when you installed the equipment:

  • 30% for equipment placed in service between 2017 and 2019
  • 26% for equipment placed in service between 2020 and 2022
  • 22% for equipment placed in service in 2023

How do I qualify for the tax credit?

Wondering if you’re eligible for a tax credit? These are the requirements:

  • You installed your system between January 1, 2006 and December 31, 2023.
  • It is located on your primary or secondary residence within the United States.
  • You own the solar power system (either purchased by cash or by financing, not leased).
  • The system is installed on one of the following property types: a house, houseboat, mobile home, cooperative apartment, condominium, or manufactured home that conforms to Federal Manufactured Home Construction and Safety Standards.

In addition to this federal tax credit, many states also offer tax incentives for solar power owners! Each state’s set of regulations is different.

Chat with one of our friendly solar experts to learn how a solar power system can benefit you, your home and your taxes. Contact us today!

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