Montana Solar Tax Credit

If you want to go solar, try to make use of the greatest incentive available to solar owners – Investment Tax Credit. In this article, we’ll tell you how to claim Solar Tax Credit in Montana.

What is the Solar Tax Credit?

The Solar Investment Tax Credit (ITC) empowers businesses and homeowners to claim a tax credit equivalent to 30% of the solar panel system's cost. Unlike a rebate, the ITC directly lowers your income tax liability.

This tax credit is applicable for solar panel installations completed before December 31, 2034. However, note that the credit decreases to 26% in 2033 and further reduces to 22% in early 2034.

How does the Montana Solar Tax Credit work in practice?

Let's break down how the Solar Tax Credit operates in practice. For instance, if a household installs a $20,000 solar panel system, they can deduct $6,000 from their income taxes, effectively reducing the net cost to $14,000. Any remaining credit can be carried over to subsequent years, ensuring you can fully benefit from the promised 30% incentive.

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Take note: to be eligible for the ITC, ownership of the solar energy system is crucial; leased systems do not qualify. The solar PV system must be newly installed or used for the first time. If you're considering a PV installation on your boat or RV, state it as your second home when making a claim.

How do I get a solar tax credit in Montana?

To secure the Solar Tax Credit, you must wait until your solar system is installed. Keep thorough records of related expenses, including invoices, receipts, and other documents showcasing qualified expenditures like solar panels, inverters, mounting equipment, and labor costs. While you don't need to submit them initially, having these records on hand is advisable in case of an audit.

For homeowners, claiming the Solar Tax Credit involves completing IRS Form 5695 and attaching it to your federal income tax return. Ensure you include your residential energy credit information on Schedule 3 (Form 1040) and file your 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 Montana Solar Tax Credit

The beauty of the Montana Solar Tax Credit lies in its comprehensive coverage. It reduces the cost of a solar installation, encompassing not only solar panels but also all associated equipment, shipping, and labor expenses. Importantly, there's no limit to how much you can claim back.

Additionally, beyond the federal solar tax credit, Montana offers its own set of state-level incentives and rebates, further easing the upfront costs of embracing solar energy. Delve deeper into these programs in our guide on Montana 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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