Maryland Solar Tax Credit

Do you know how to make a solar system 30% cheaper? Claim Solar Tax Credit. In this article, we’ll explore how to claim a Solar Tax Credit in Maryland.

What is the Solar Tax Credit?

The Solar Investment Tax Credit (ITC) empowers businesses and homeowners in Maryland to receive a tax credit equivalent to 30% of the cost of a solar panel system, directly reducing their income tax obligations as opposed to providing a rebate.

The Solar Tax Credit applies to those installing solar panels before December 31, 2034, with reductions to 26% in 2033 and further dropping to 22% at the beginning of 2034.

How does the Solar Tax Credit work in practice?

When a household installs a $10,000 solar panel system, they can deduct $3,000 from their income taxes, effectively lowering the net cost to $7,000. Any remaining credit can be carried over to subsequent years, ensuring the realization of the promised 30% solar incentive.

How do I get a solar tax credit in Maryland?

To qualify for the ITC, ownership of the solar energy system is mandatory. The solar PV system must be installed within the United States and must be new or used for the first time. If you want to claim for a PV installation on a boat or an RV, it should be designated as a second home.

Claiming the Solar Tax Credit occurs after the solar system is installed. Maintain detailed records of installation expenses, including invoices, receipts, and other documentation demonstrating qualified expenditures such as solar panels, inverters, mounting equipment, and labor costs. While these documents are not required for submission, they may be necessary in case of an audit.

Read also

Tax Day has never been so shiny: Federal Solar Tax Credit in 2024

To claim the Solar Tax Credit as a homeowner, complete IRS Form 5695, attach it to the federal income tax return, and ensure that your residential energy credit information is added to Schedule 3 (Form 1040). File the tax return by the applicable 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 Maryland Solar Tax Credit

The cost reduction provided by the Solar Tax Credit in Maryland covers not only solar panels but also all related equipment, shipping, and labor expenses, with no cap on the claimable amount. In addition to the federal solar tax credit, Maryland may offer state-level incentives and rebates for solar installations, further alleviating the upfront costs of transitioning to a solar energy system. Refer to our guide on Maryland solar incentives for more detailed information.

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.

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