What is Tax Credit ?<\/span><\/h2><\/span>

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A tax credit is an incentive scheme offered for a dollar-for-dollar reduction in the income tax amount you owe at the end of the financial year. For example, if you have to pay $1,000 in lieu of federal income taxes; then claiming a $1,000 federal tax credit will give you a waiver to pay this amount as an income tax. A federal tax credit is also called an Investment Tax Credit or ITC [2]. <\/span><\/p>\n<\/div>

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What Is The Federal Solar Tax Credit?<\/span><\/h2><\/span>

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If you are a homeowner and decided to install solar panels in your home, then you will be eligible for getting a federal tax credit. Thus you will get a credit for your income taxes, which saves you money over the tax bills [1]. To claim a tax credit, the solar system installation should be done within the tax year. Homeowners who choose to install solar PV systems in 2020 or 2021 are qualified for a 26% tax credit. However, in August 2022 government passed a regulation to increase the tax credit to 30% for the years between 2022 – 2032 [2]. <\/span><\/p>\n<\/div>

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Federal Solar Tax Credit eligibility checklist for 2022<\/span><\/h2><\/span>

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If you fulfill all of the requirements listed below, you could be qualified for getting federal tax credit [3]:<\/span><\/p>\n

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• The installation of the solar panel system has been done between January 1, 2017, and December 31, 2034.<\/span><\/li>\n
• Your installed solar panel system is located at the residence within the United States territory.<\/span><\/li>\n
• You should have ownership rights for the installed solar panel system (i.e. you have purchased it in cash or through a financing option).<\/span><\/li>\n
• The installed solar PV system should be new or utilized for the first time. The ITC can only be claimed on the original installations.<\/span><\/li>\n<\/ul>\n<\/div>
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  Benefits of Installing Solar Panels<\/h2><\/span>

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  Besides getting tax benefits, there are multiple other advantages to adopting solar energy for your home, which are given below [4], [5]:<\/p>\n

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  • You will save a significant amount on electricity bills. Your energy bills will either reduce or eliminate after installing a net metering option.<\/span><\/li>\n
  • By installing a solar panel system, your home\u2019s worth will increase.<\/span><\/li>\n
  • Solar power works everywhere. In the U.S. most states have an abundance of solar resources e.g. California, Texas, and Florida are the top three states with extensive sun hours.<\/span><\/li>\n
  • Solar power is good for the environment. Each kilowatt-hour (kWh) of electricity produce by solar panels will significantly reduce greenhouse gases.<\/span><\/li>\n<\/ul>\n<\/div>
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    Final Thoughts<\/span><\/h2><\/span>

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    The federal tax credit for solar energy will empower home owners to take advantage of cost efficient means of generating electricity. While installing solar panel<\/a> for the first time may seems to be a high investment, but when you compare it with the benefits received in short and long term you will get a significant return on investment. Therefore going solar worth you more than you have to paid for. For getting a federal solar tax credit advantage, we recommend you to contact with a professional tax consultant and take advice on receiving tax reduction claims.<\/span><\/p>\n<\/div>

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    References<\/span><\/h2><\/span>

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    1. L. Murphy and L. Pelchen, \u2018Solar Tax Credit By State In 2022: What You Need To Know\u2019, <\/span>Forbes Home<\/span><\/i>, Sep. 13, 2022. https:\/\/www.forbes.com\/home-improvement\/solar\/solar-tax-credit-by-state\/ <\/a>(accessed Sep. 17, 2022).<\/span><\/li>\n
    2. E. US DoE, \u2018Homeowner\u2019s Guide to the Federal Tax Credit for Solar Photovoltaics\u2019, <\/span>Energy.gov<\/span><\/i>. https:\/\/www.energy.gov\/eere\/solar\/homeowners-guide-federal-tax-credit-solar-photovoltaics (accessed Sep. 17, 2022).<\/span><\/li>\n
    3. J. Marsh, \u2018Federal Solar Tax Credit for Homeowners: Complete Guide | EnergySage\u2019, <\/span>EnergySage Blog<\/span><\/i>, Aug. 16, 2022. https:\/\/news.energysage.com\/solar-tax-credit-explained\/ (accessed Sep. 17, 2022).<\/span><\/li>\n
    4. E. S. US DoE, \u2018Benefits of Residential Solar Electricity\u2019, <\/span>Energy.gov<\/span><\/i>, Sep. 17, 2022. https:\/\/www.energy.gov\/energysaver\/benefits-residential-solar-electricity (accessed Sep. 17, 2022).<\/span><\/li>\n
    5. T. Holowka, \u2018Top four benefits of installing solar panels on your home | U.S. Green Building Council\u2019, <\/span>USGBC<\/span><\/i>, Apr. 05, 2017. https:\/\/www.usgbc.org\/articles\/top-four-benefits-installing-solar-panels-your-home (accessed Sep. 17, 2022).<\/span><\/li>\n<\/ol>\n<\/div><\/div><\/div><\/div><\/div>\n","protected":false},"excerpt":{"rendered":"","protected":false},"author":1,"featured_media":3081,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"yoast_head":"\n