Idaho Solar Tax Credit

13 Dec 2023
3 min
Beginner

Andrey GorichenskiAuthor

Going solar in Idaho is so much easier with the help of Solar Tax Credit. How do you get it? Here is a quick article on how to claim Solar Tax Credit in Idaho.

What is the Solar Tax Credit?

The Solar Investment Tax Credit (ITC) enables businesses and homeowners to receive a tax credit worth 30% of the total cost of a solar panel system. Unlike a rebate, the ITC directly reduces the amount of income tax you are required to pay.

How does the Idaho Solar Tax Credit work in practice?

The tax credit directly reduces the amount of income tax owed to the federal government. For example, if the cost of installing a solar system is $10,000, a 30% ITC would provide a tax credit of $3,000. This means the taxpayer can subtract $3,000 from their total income tax liability.

If the tax credit amount exceeds the individual or business's tax liability for the given year, the remaining credit can often be carried over to the following year. This ensures that the full benefit of the credit is realized.

To be eligible for the Solar Tax Credit, the taxpayer must own the solar energy system (not lease it) and ensure that it is new or used for the first time. Additionally, the system must be installed in the United States.

How do I get a solar tax credit in Idaho?

To claim the Solar Tax Credit, follow these steps after installing your solar system. Keep thorough records of installation expenses. Fill out IRS Form 5695 and include it with your federal income tax return. Add your residential energy credit details to Schedule 3 (Form 1040). Ensure you file your tax return by the relevant deadline.

Need help? Follow our guide!

We cover filling out the forms for claiming ITC step by step

Step-by-step guide

Benefits of the Idaho Solar Tax Credit

The Idaho Solar Tax Credit cuts down the cost of a solar installation, covering not just solar panels but also all equipment, shipping, and labor expenses. There's no limit to how much you can claim.

Apart from the federal solar tax credit, Idaho offers state-level incentives and rebates for solar installations. These programs can additionally lower the initial costs of setting up a solar energy system. Find more details in our guide on Idaho solar incentives.

Andrey Gorichenski

Senior Editor

Andrey had been a news editor and freelance writer for a number of medias before joining A1SolarStore team. Climate change and its impact on people's lives has always been among his interests and it partially explains his degree in Philosophy and Ethics.