New York Solar Tax Credit

New York is a nice state for solar, but the upfront costs for the purchase and installation of a solar system can be painful for the family budget. To avoid this, take advantage of the greatest incentive available to solar owners – Investment Tax Credit. Here is a quick article on how to claim Solar Tax Credit in New York.

What is the Solar Tax Credit?

The Solar Investment Tax Credit (ITC) permits businesses and homeowners to claim a tax credit equal to 30% of the solar panel system's cost. Unlike a rebate, the ITC directly diminishes the owed income tax amount.

The Solar Tax Credit is applicable to those who install solar panels before December 31, 2034, decreasing to 26% in 2033 and further to 22% in early 2034.

How does the New York Solar Tax Credit work 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 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 not eligible. The installation must occur in the United States and involve a new or first-time-used solar PV system.

How do I get a solar tax credit in New York?

You can claim the tax after your solar system is installed. Detailed records, including invoices, receipts, and other proof of qualified expenditures such as solar panels, inverters, mounting equipment, and labor costs, should be retained.

Additionally, IRS Form 5695, along with Schedule 3 (Form 1040), needs to be completed and attached to the federal income tax return to claim the Solar Tax Credit.

Need help? Follow our guide!

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

Step-by-step guide

Benefits of the New York Solar Tax Credit

The Solar Tax Credit not only covers solar panels but also includes all associated equipment, shipping, and labor expenses. There is no maximum limit on the claimable amount.

Additionally, New York offers its own state-level incentives and rebates, further lowering the upfront costs of installing a solar energy system. For more information, refer to our comprehensive guide on New York 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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