Oklahoma Solar Tax Credit

A solar power system in Oklahoma will pay for itself a couple of times during its lifespan. But switch smartly! To save money, benefit from the greatest incentive available to solar owners – Investment Tax Credit. Here is a quick article on how to claim Solar Tax Credit in Oklahoma.

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 reduces your owed income tax.

This tax credit is open to all who install solar panels before December 31, 2034, gradually decreasing to 26% in 2033 and 22% at the onset of 2034.

How does the Oklahoma Solar Tax Credit work in practice?

In practice, if a household invests in a $20,000 solar panel system, they can subtract $6,000 from their income taxes. This effectively brings down the net cost of the photovoltaic system to $14,000. Any unused credit can be carried over to subsequent years, ensuring you realize the full 30% promised by this solar incentive.

Read also

U.S. Climate Bill: 30% Solar Tax Credit comes back

To be eligible for the ITC, ownership of the solar energy system is crucial—leased systems do not qualify. The system must be installed in the United States, and it must be new or used for the first time. If considering a PV installation on a boat or RV, categorize it as your second home.

How do I get a solar tax credit in Oklahoma?

To claim the Solar Tax Credit, gather detailed records of installation expenses, including invoices, receipts, and relevant documentation showcasing qualified expenditures such as solar panels, inverters, mounting equipment, and labor costs. Although not required for submission, keep these records for potential audits.

As a homeowner, complete IRS Form 5695 and attach it to your federal income tax return. Ensure you include 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 Oklahoma Solar Tax Credit

This tax credit extends beyond solar panels to cover all associated equipment, shipping, and labor expenses. Notably, there's no cap on the amount you can claim back.

In addition to the federal solar tax credit, Oklahoma offers its state-level incentives and rebates for solar installations, further reducing upfront costs. Delve into our guide on Oklahoma solar incentives for a comprehensive overview.

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.

More articles from this author