Oregon Solar Tax Credit

Living in Oregon and thinking of installing solar panels? Go for it! Oregon gets enough sunlight, which means that installing solar panels will significantly reduce your bills. If the high upfront costs daunt you, 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 Oregon.

What is the Solar Tax Credit?

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

This credit is available for solar panel installations completed before December 31, 2034, diminishing to 26% in 2033 and further to 22% in early 2034.

How does the Oregon Solar Tax Credit work in practice?

For instance, if a household installs a $20,000 solar panel system, they can subtract $6,000 from their income taxes. This effectively reduces the net cost of the PV system to $14,000. The unused credit can be carried over to subsequent years, ensuring the realization of the promised 30% solar incentive.

To qualify for the ITC, ownership of the solar energy system is crucial, with leased systems not meeting the criteria. The system must be installed within the United States, and it must be new or used for the first time. If considering a PV installation on a boat or RV, classify it as a second home.

How do I get a solar tax credit in Oregon?

To claim the Solar Tax Credit, maintain meticulous records of installation expenses, such as invoices, receipts, and other documentation illustrating qualified expenditures. While not required during filing, these documents may be essential in case of an audit.

April 15

most common National Tax Day date

As a homeowner, complete IRS Form 5695 and attach it to your federal income tax return to claim the Solar Tax Credit. Incorporate 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 Oregon Solar Tax Credit

The scope of expenses covered by the Oregon Solar Tax Credit extends beyond just solar panels, encompassing all related equipment, shipping, and labor costs. Importantly, there is no cap on the amount you can claim back.

Furthermore, complementing the federal solar tax credit, Oregon offers additional state-level incentives and rebates for solar installations, further easing the initial costs. Explore our guide on Oregon 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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