Michigan Solar Tax Credit

Going solar is easy in Michigan when you take advantage of the Investment Tax Credit which is available to all Americans. It lets reduce the net cost of a solar installation by 30%. In this article, we’ll talk about how to claim Solar Tax Credit in Michigan.

What is the Solar Tax Credit?

The Solar Tax Credit in Michigan is designed to assist individuals and businesses, providing a discount on the cost of solar panels. Rather than giving you money back, it directly reduces the amount of taxes you need to pay. This discount is available to those who install solar panels before December 31, 2034. After that, the discount decreases to 26% in 2033 and further drops to 22% at the beginning of 2034.

How does the Solar Tax Credit work in practice?

In simple terms, let's say you spend $15,000 on solar panels for your home. With the Solar Tax Credit, you can subtract $4,500 from your tax obligation. This means you effectively pay only $10,500 in the end. Any remaining discount can be used in the following years.

How do I get a solar tax credit in Michigan?

Claiming the Solar Tax Credit happens after the solar system is installed. Leased systems aren't eligible; you must own the system. The system has to be installed within the United States and must be new or used for the first time — you can’t claim ITC for the same system twice. Keep all the paperwork from the solar panel installation, as it may be needed if someone checks, even though you don't need to submit it.

To claim the Solar Tax Credit as a homeowner, complete IRS Form 5695 and attach it to your federal income tax return. Add residential energy credit info to Schedule 3 (Form 1040). File your tax return before the deadline, typically April 15, which is National Tax Day in the US.

Need help? Follow our guide!

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

Step-by-step guide

Benefits of the Michigan Solar Tax Credit

The great part is that the discount covers more than just the cost of the solar panels; it includes everything—panels, mounting, shipping, and the work. There's no limit to how much you can get back. Additionally, besides the national discount, Michigan may offer other ways to assist with the cost of adopting solar energy. Check out our guide on Michigan solar incentives for more details.

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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