North Dakota Solar Tax Credit

North Dakota is a fairly sunny state, where a solar system can help you save money. But what if you can save 30% more? To make it happen, 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 North Dakota.

What is the Solar Tax Credit?

The Solar Investment Tax Credit, or ITC, empowers both businesses and homeowners to claim a tax credit amounting to 30% of the total cost of a solar panel system. Unlike rebates, the ITC directly diminishes your owed income tax.

This solar tax credit is applicable to installations completed before December 31, 2034, with a gradual reduction to 26% in 2033 and 22% at the start of 2034.

How does the North Dakota Solar Tax Credit work in practice?

Consider a household investing $20,000 in a solar panel system; they can subtract $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.

Eligibility criteria include ownership of the solar energy system, with leased systems not qualifying. The system must be installed within the United States, and it should be either new or used for the first time. For installations on boats or RVs, categorize them as your second home to make a valid claim.

How do I get a solar tax credit in North Dakota?

Claiming the Solar Tax Credit occurs post-installation. Maintain meticulous records of all related expenses, such as invoices, receipts, and documentation showcasing qualified expenditures like solar panels, inverters, mounting equipment, and labor costs. While not mandatory for submission, these documents may be required in the event of an audit.

April 15

most common National Tax Day date

Homeowners must complete IRS Form 5695 and attach it to their federal income tax return. Incorporate residential energy credit information into Schedule 3 (Form 1040) and 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 North Dakota Solar Tax Credit

The Solar Tax Credit in North Dakota extends beyond solar panels, encompassing 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, North Dakota offers additional state-level incentives and rebates for solar installations, further mitigating upfront costs. Explore our comprehensive guide on North Dakota solar incentives for more details.

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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