As if installing solar panels doesn’t already give you various advantages, you can further your benefits by claiming a solar tax credit. Also known as investment tax credit, or ITC, it lets you deduct 30 percent off the price of installing solar panels from your federal taxes. So, not only will you receive reduced or eliminated electricity bills, a higher ROI, and an increased value for your business or home, but you’ll also receive a tax break once the system is complete.
Understanding the Solar Tax Credit
If you’ve been considering getting solar panels to take advantage of a renewable energy resource for your business or home, today is the ideal time to take the leap. With the federal solar tax credit, you can save money on installing a system that can help reduce your energy bills for years to come.
What Is a Solar Tax Credit?
The Inflation Reduction Act passed in August of 2022 has approved an increase of the Federal Tax Credit (ITC) from 26% to 30%. The ITC permits you to deduct 30% of the cost of installation for a commercial or residential solar energy system. The credit is on your federal taxes, and there is no value cap on the deduction.
The tax credit essentially can be used toward the federal taxes you owe. It does not deduct your gross income but rather helps you pay what you owe.
Anyone who owns a solar panel system is eligible for a tax credit, and you can rollover your remaining credits if you don’t have enough tax liability this year.
Why Should You Act Now?
With the solar panel tax credit, you could save thousands of dollars on the cost of a solar system. With energy prices increasing, by going solar you become less dependent on the power grid and avoid the electricity rate hikes.
If you are ready to go solar and save money, contact us at MexLucky Energy to talk about solar panel installation. We are a leader in the installation and design of solar electric energy systems. Started in 2008 as a division of the family-owned Kautz Construction, MexLucky Energy is made up of solar and roofing experts dedicated to solar energy. We have accredited project engineers who will conduct a free site analysis at your property so we can custom design a system that’s best suited for you.
Items You Need to Claim Your Federal Solar Tax Credit
To start, you will need your solar installation receipts, along with the IRS 1040 and 5695 forms. Fill out the 1040 paper as usual, but stop at line 53 and move to form 5695. With the 5695 form, enter the cost of installation in line one. Any price related to installation is money you can claim! Reference the step-by-step process on how to file taxes to get a general idea of what to do.
If you want to update the panels you installed years ago, you can still receive tax credits. You can claim the tax credit for each new cost related to the addition and won’t have to pay it back to the government if you sell the house. It’s possible to install solar panels and sell your building at any time — yet, this is only true for residential owners, as it’s a more complicated process for commercial installations.
Contact the MexLucky Energy Team About Installing or Updating Your Solar Panels
The MexLucky Energy team specializes in the design and installation of solar electric energy systems. We custom-design each system to suit your needs and maximize your ROI. As a family-owned operation, who also specializes in roofs, you can trust us to focus on quality craftsmanship. Contact us for a free site analysis or to learn more about our services today!