Nebraska Solar Tax Credit

Nebraska enjoys enough sunlight to help a PV system pay for your electricity bills and is one of the best states for solar. But you can cut not only your electricity bill, but also your costs for installing this PV system by a third! How is that possible? Read in our article on how to claim Solar Tax Credit in Nebraska.

What is the Solar Tax Credit?

The Solar Investment Tax Credit (ITC) enables businesses and homeowners to receive a tax credit amounting to 30% of the total expenditure on a solar panel system. Unlike a rebate, the ITC directly diminishes the income tax owed.

This credit is accessible to those who install solar panels before December 31, 2034, with a gradual reduction to 26% in 2033 and further to 22% at the onset of 2034.

How does the Nebraska Solar Tax Credit work in practice?

For instance, if a household invests in a $20,000 solar panel system, they can deduct $6,000 from their income taxes, bringing down the net cost to $14,000. Any remaining credit can be carried over to subsequent years, ensuring fulfillment of the promised 30% solar incentive.

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To qualify for the ITC, ownership of the solar energy system is mandatory, as leased systems do not meet the criteria. Installation must take place in the United States, and the solar PV system should be either new or used for the first time. Those seeking credits for PV installations on boats or RVs should categorize them as second homes

How do I get a solar tax credit in Nebraska?

The claim for the Solar Tax Credit is made after the solar system installation is completed. Maintain meticulous records of expenses related to the installation, including invoices, receipts, and other documentation detailing qualified expenditures like solar panels, inverters, mounting equipment, and labor costs. While not required for submission, these records may be necessary in case of an audit.

For homeowners, the process involves completing IRS Form 5695 and attaching it to the federal income tax return. Ensure the inclusion of residential energy credit information in Schedule 3 (Form 1040) and 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 Nebraska Solar Tax Credit

The cost reduction facilitated by the Nebraska Solar Tax Credit encompasses not only solar panels but also all associated equipment, shipping, and labor expenses. Importantly, there is no cap on the amount that can be claimed back.

Complementing the federal solar tax credit, Nebraska offers additional state-level incentives and rebates for solar installations, further easing the initial costs. Dive deeper into these programs through our comprehensive guide on Nebraska 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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