{"id":1547,"date":"2022-12-05T11:37:00","date_gmt":"2022-12-05T11:37:00","guid":{"rendered":"https:\/\/www.irstaxapp.com\/?p=1547"},"modified":"2022-12-07T04:30:10","modified_gmt":"2022-12-07T04:30:10","slug":"solar-tax-credit-2023","status":"publish","type":"post","link":"https:\/\/www.irstaxapp.com\/solar-tax-credit-2023\/","title":{"rendered":"How to Claim Solar Tax Credit 2023?"},"content":{"rendered":"\n<figure class=\"wp-block-image size-large is-resized\"><picture><source srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-1024x576.webp 1024w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-300x169.webp 300w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-768x432.webp 768w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-150x84.webp 150w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-750x422.webp 750w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-1140x641.webp 1140w,https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023.webp 1200w\" sizes=\"(max-width: 1173px) 100vw, 1173px\" type=\"image\/webp\"><img src=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-1024x576.png\" height=\"660\" width=\"1173\" srcset=\"https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-1024x576.png 1024w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-300x169.png 300w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-768x432.png 768w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-150x84.png 150w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-750x422.png 750w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023-1140x641.png 1140w, https:\/\/www.irstaxapp.com\/wp-content\/uploads\/2022\/12\/solar-tax-credit-2023.png 1200w\" sizes=\"(max-width: 1173px) 100vw, 1173px\" class=\"wp-image-6199 sp-no-webp\" alt=\"solar tax credit 2023\" decoding=\"async\" loading=\"lazy\"  > <\/picture><\/figure>\n\n\n\n<p>Solar tax credit 2023 is a golden opportunity, like the\u00a0<a href=\"https:\/\/www.irstaxapp.com\/gift-electric-car-to-spouse-get-tax-credit\/\" target=\"_blank\" rel=\"noreferrer noopener\">tax credit for buying an electric vehicle<\/a>\u00a0I posted earlier. This tax-saving opportunity arose as Congress extended the original Energy Policy Act of 2005. Consequentially, individuals and businesses can invest in the solar energy system and claim 30 percent of the investment as an investment tax credit (ITC). The new law enacted in August 2022 as part of the\u00a0<strong><a href=\"https:\/\/en.wikipedia.org\/wiki\/Inflation_Reduction_Act_of_2022\" target=\"_blank\" rel=\"noopener\">Inflation Reduction Act<\/a>\u00a0<\/strong>extended the benefit of solar investment tax credit to another 10 additional years. So, the solar investment tax credit is now available to homeowners and others at 30% till tax year 2032 and 26% in 2033, and 22% in 2034.<\/p>\n\n\n\n<div id=\"ez-toc-container\" class=\"ez-toc-v2_0_62 counter-hierarchy ez-toc-counter ez-toc-grey ez-toc-container-direction\">\n<p class=\"ez-toc-title\">Table of Contents<\/p>\n<label for=\"ez-toc-cssicon-toggle-item-662d9765751e5\" class=\"ez-toc-cssicon-toggle-label\"><span class=\"\"><span class=\"eztoc-hide\" style=\"display:none;\">Toggle<\/span><span class=\"ez-toc-icon-toggle-span\"><svg style=\"fill: #999;color:#999\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" class=\"list-377408\" width=\"20px\" height=\"20px\" viewBox=\"0 0 24 24\" fill=\"none\"><path d=\"M6 6H4v2h2V6zm14 0H8v2h12V6zM4 11h2v2H4v-2zm16 0H8v2h12v-2zM4 16h2v2H4v-2zm16 0H8v2h12v-2z\" fill=\"currentColor\"><\/path><\/svg><svg style=\"fill: #999;color:#999\" class=\"arrow-unsorted-368013\" xmlns=\"http:\/\/www.w3.org\/2000\/svg\" width=\"10px\" height=\"10px\" viewBox=\"0 0 24 24\" version=\"1.2\" baseProfile=\"tiny\"><path d=\"M18.2 9.3l-6.2-6.3-6.2 6.3c-.2.2-.3.4-.3.7s.1.5.3.7c.2.2.4.3.7.3h11c.3 0 .5-.1.7-.3.2-.2.3-.5.3-.7s-.1-.5-.3-.7zM5.8 14.7l6.2 6.3 6.2-6.3c.2-.2.3-.5.3-.7s-.1-.5-.3-.7c-.2-.2-.4-.3-.7-.3h-11c-.3 0-.5.1-.7.3-.2.2-.3.5-.3.7s.1.5.3.7z\"\/><\/svg><\/span><\/span><\/label><input type=\"checkbox\"  id=\"ez-toc-cssicon-toggle-item-662d9765751e5\"  aria-label=\"Toggle\" \/><nav><ul class='ez-toc-list ez-toc-list-level-1 ' ><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-1\" href=\"https:\/\/www.irstaxapp.com\/solar-tax-credit-2023\/#What_type_of_expenditure_is_covered_by_the_solar_tax_credit_2023\" title=\"What type of expenditure is covered by the solar tax credit 2023?\u00a0\">What type of expenditure is covered by the solar tax credit 2023?\u00a0<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-2\" href=\"https:\/\/www.irstaxapp.com\/solar-tax-credit-2023\/#Who_is_eligible_for_the_solar_tax_credit_2023\" title=\"Who is eligible for the solar tax credit 2023?\">Who is eligible for the solar tax credit 2023?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-3\" href=\"https:\/\/www.irstaxapp.com\/solar-tax-credit-2023\/#Can_I_carry_forward_the_solar_tax_credit_2023\" title=\"Can I carry forward the solar tax credit 2023?\">Can I carry forward the solar tax credit 2023?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-4\" href=\"https:\/\/www.irstaxapp.com\/solar-tax-credit-2023\/#How_to_claim_the_solar_tax_credit_2023\" title=\"How to claim the solar tax credit 2023?\">How to claim the solar tax credit 2023?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-5\" href=\"https:\/\/www.irstaxapp.com\/solar-tax-credit-2023\/#When_is_the_solar_tax_credit_expiration\" title=\"When is the solar tax credit expiration?\">When is the solar tax credit expiration?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-6\" href=\"https:\/\/www.irstaxapp.com\/solar-tax-credit-2023\/#How_does_solar_tax_credit_by_state_affect_federal_ITC\" title=\"How does solar tax credit by state affect federal ITC?\">How does solar tax credit by state affect federal ITC?<\/a><\/li><li class='ez-toc-page-1 ez-toc-heading-level-2'><a class=\"ez-toc-link ez-toc-heading-7\" href=\"https:\/\/www.irstaxapp.com\/solar-tax-credit-2023\/#Is_solar_tax_credit_for_nonprofit_organizations_allowed\" title=\"Is solar tax credit for nonprofit organizations allowed?\">Is solar tax credit for nonprofit organizations allowed?<\/a><\/li><\/ul><\/nav><\/div>\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"What_type_of_expenditure_is_covered_by_the_solar_tax_credit_2023\"><\/span>What type of expenditure is covered by the solar tax credit 2023?\u00a0<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The following expenditures are covered for the claim of solar tax credit :&nbsp;<\/p>\n\n\n\n<ul><li>solar panels purchase cost<\/li><li>Installation cost that includes labor costs for installation, including permitting fees, inspection costs, and developer fees&nbsp;<\/li><li>Any and all additional solar equipment, like inverters, wiring, and mounting hardware&nbsp;<\/li><li>Energy storage systems rated three kilowatt-hours (kWh) or greater (starting in 2023).&nbsp;<\/li><li>Any taxes paid on eligible solar equipment expenses&nbsp;<\/li><\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Who_is_eligible_for_the_solar_tax_credit_2023\"><\/span>Who is eligible for the solar tax credit 2023?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Both individuals and businesses can claim solar investment tax credits from 2022 to 2033 at 30% of investments. Here are the conditions that must be fulfilled to qualify for the solar&nbsp;<a target=\"_blank\" href=\"https:\/\/www.irstaxapp.com\/hrf_faq\/what-are-tax-credits\/\" rel=\"noreferrer noopener\">tax credit<\/a>.<\/p>\n\n\n\n<ol><li>You must install the solar energy system.<\/li><li>You must own a solar energy system. Since the main criterion is ownership, you do not get ITC if you sign a lease agreement for the solar electric system.<\/li><li>Your solar PV system must be new or used for the first time \u2013 the credit can only be claimed on the original installation of the solar equipment.\u00a0<\/li><li>You are eligible even if the solar energy system is not in your primary residence. You can claim the solar tax credit if you own the property and live in it for part of the year.<\/li><\/ol>\n\n\n\n<p>See this <a href=\"https:\/\/www.irstaxapp.com\/solar-tax-credit-calculator\/\">solar tax credit calculator<\/a> as well<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Can_I_carry_forward_the_solar_tax_credit_2023\"><\/span>Can I carry forward the solar tax credit 2023?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The answer is Yes. Suppose your federal tax liability is lower than the total amount of your ITC savings. In that case, you can carry forward any remaining credits to the following year till you exhaust the full solar tax credits.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_to_claim_the_solar_tax_credit_2023\"><\/span>How to claim the solar tax credit 2023?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>It is always better to take the help of tax professionals to fill out the appropriate form for a claim of various tax credits and deductions.<\/p>\n\n\n\n<ol class=\"has-black-color has-text-color has-background has-medium-font-size\" style=\"background-color:#fbefcc\"><li>Determine if you are eligible for the Federal ITC. Read the eligibility questions above.<\/li><li>Complete\u00a0<a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/f5695.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">IRS Form 5965<\/a>\u00a0to validate your qualification for renewable energy credits<\/li><li>Then, on Part- I of the tax form, calculate the credit. You file your solar system as \u201cqualified solar electric property costs.\u201d <\/li><li>Then, on line 1, enter your project\u2019s total costs as written in your solar contract.\u00a0<\/li><li>Complete the calculations on lines 6a and 6b.\u00a0<\/li><li>On line 14, calculate any tax liability limitations .IRS provides a\u00a0<a href=\"https:\/\/www.irs.gov\/pub\/irs-pdf\/i5695.pdf\" target=\"_blank\" rel=\"noreferrer noopener\">Residential Energy Efficient Property Credit Limit Worksheet<\/a> for your help.<\/li><li>Finally, complete the calculations on lines 15 and 16. <\/li><\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"When_is_the_solar_tax_credit_expiration\"><\/span>When is the solar tax credit expiration?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>The solar tax credit will continue offering 30 percent savings until 2033 and 26% in 2034. Secondly, the ITC you are eligible for and claimed on your tax return will roll over to next year till finally exhausted.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"How_does_solar_tax_credit_by_state_affect_federal_ITC\"><\/span>How does solar tax credit by state affect federal ITC?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Solar tax credits by states may affect your federal taxable income but not the claim of your federal solar tax credits. This is so because getting any state tax credit for your solar power system will not decrease your federal tax credits. So, in a way, your effect of credit will decrease a little bit due to the addition to federal income. However, the rebates for solar energy investments that you get from the state will be in addition to <strong>federal<\/strong> <strong>solar tax credits <\/strong>without any impact.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span class=\"ez-toc-section\" id=\"Is_solar_tax_credit_for_nonprofit_organizations_allowed\"><\/span>Is solar tax credit for nonprofit organizations allowed?<span class=\"ez-toc-section-end\"><\/span><\/h2>\n\n\n\n<p>Earlier, nonprofit organizations could not claim solar energy investment credits because they didn\u2019t have the tax liability required to qualify. However, with the passage of 2022\u2019s Inflation Reduction Act,  they can also claim  30% tax credits on their return; therefore, starting January 1, 2023, non-profit organizations are also eligible for the\u00a0federal solar tax credit, even if they do not have taxable profits<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Solar tax credit 2023 is a golden opportunity, like the\u00a0tax credit for buying an electric vehicle\u00a0I posted earlier. This tax-saving opportunity arose as Congress extended the original Energy Policy Act of 2005. Consequentially, individuals and businesses can invest in the solar energy system and claim 30 percent of the investment as an investment tax credit [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":6199,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":[],"categories":[31],"tags":[],"amp_enabled":false,"_links":{"self":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/1547"}],"collection":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/comments?post=1547"}],"version-history":[{"count":1,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/1547\/revisions"}],"predecessor-version":[{"id":6200,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/posts\/1547\/revisions\/6200"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media\/6199"}],"wp:attachment":[{"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/media?parent=1547"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/categories?post=1547"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.irstaxapp.com\/wp-json\/wp\/v2\/tags?post=1547"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}