Kentucky Solar Tax Credit

13 Dec 2023
3 min
Beginner

Andrey GorichenskiAuthor

Discover the simplicity of going solar in Kentucky with the help of the Solar Tax Credit. Wondering how to go about it? Here's a simple guide on securing the Solar Tax Credit in Kentucky.

What is the Solar Tax Credit?

The Solar Investment Tax Credit (ITC) gives businesses and homeowners a tax credit equal to 30% of the total cost of a solar panel system. This credit directly lowers the income tax you have to pay.

How does the Solar Tax Credit work?

The tax credit directly reduces the amount of income tax you owe to the federal government. For example, if the cost of a solar system is $10,000, a 30% ITC would give you a tax credit of $3,000. This lets you subtract $3,000 from your total income tax bill. If the tax credit is more than what you owe in taxes for the year, any extra credit can often be carried over to the next year, making sure you get the full benefit.

To qualify for the Solar Tax Credit, you need to own the solar energy system, not lease it. The system must be new or used for the first time (you can’t claim the ITC for the same system twice).

How do I get a solar tax credit in Kentucky?

To claim the Solar Tax Credit, follow these steps after installing your solar system:

Have a system installed. Keep good 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).
Make sure to file your tax return by the relevant deadline. April 15 is the National Tax Day.

Need help? Follow our guide!

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

Step-by-step guide

Benefits of the Solar Tax Credit in Kentucky

The Solar Tax Credit significantly 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.

Beyond the federal solar tax credit, Kentucky provides state-level incentives and rebates for solar installations, making it even more affordable to set up a solar energy system. Learn more in our guide on Kentucky 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.