Missouri Solar Tax Credit

With nearly 5 peak sunlight hours per day, Missouri is a perfect state for installing a solar system. And the Investment Tax Credit will make your project even more advantageous. In this article, we’ll walk you through how to claim Solar Tax Credit in Missouri.

What is the Solar Tax Credit?

The Solar Investment Tax Credit, or ITC, empowers businesses and homeowners to receive a tax credit amounting to 30% of the total cost of a solar panel system. Unlike a rebate, the ITC directly diminishes the income tax liability.

This tax credit is accessible to those who install solar panels before December 31, 2034, gradually decreasing to 26% in 2033 and further down to 22% in early 2034.

How does the Missouri Solar Tax Credit work in practice?

Consider a household investing in a $20,000 solar panel system. By utilizing the Solar Tax Credit, they can deduct $6,000 from their income taxes, resulting in a net cost reduction to $14,000. Any remaining credit can be carried over to subsequent years, ensuring the fulfillment of the promised 30% solar incentive.

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To qualify for the ITC, ownership of the solar energy system is essential, as leased systems are ineligible. The installation must be within the United States, and the solar PV system should be new or used for the first time. If claiming the credit for a PV installation on a boat or RV, classify it as your second home.

How do I get a solar tax credit in Missouri?

The Solar Tax Credit is claimed post-installation of the solar system. Maintain detailed records of all related expenses, such as invoices and receipts, showcasing qualified expenditures like solar panels, inverters, mounting equipment, and labor costs. Although not mandatory for submission, these documents may be necessary in case of an audit.

Homeowners claiming the credit must complete IRS Form 5695 and attach it to their federal income tax return, including residential energy credit information on Schedule 3 (Form 1040). Ensure timely filing 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 Missouri Solar Tax Credit

The cost reduction covered by the Missouri Solar Tax Credit extends beyond solar panels, encompassing all equipment, shipping, and labor expenses. Notably, there is no cap on the amount that can be claimed back.

Beyond the federal solar tax credit, Missouri offers additional state-level incentives and rebates, further mitigating the upfront costs associated with installing a solar energy system. For a more comprehensive understanding, explore our guide on Missouri solar incentives.

Julia Zaraeva

Author

Years of experience in translation and a love of nature help Julia find the right words to encourage going solar. She joined the team in 2023 and is happy to make her contribution to a greener future.

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