Pennsylvania Solar Tax Credit

Decided to install solar panels in Pennsylvania but worried about the upfront costs? Investment Tax Credit can help to bring them down by 30%! Interested? Explore this brief guide on how to claim Solar Tax Credit in Pennsylvania.

What is the Solar Tax Credit?

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

This tax credit is accessible to those installing solar panels until December 31, 2034. It gradually decreases to 26% in 2033 and further to 22% at the start of 2034.

How does the Pennsylvania Solar Tax Credit work in practice?

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

To qualify for the ITC, ownership of the solar energy system is crucial—leased systems do not qualify. Installation must occur within the United States, and the solar PV system must be either new or used for the first time. For those considering claiming a PV installation on a boat or RV, state it as a second home.

How do I get a solar tax credit in Pennsylvania?

To claim the Solar Tax Credit, record all expenses related to your solar energy system installation, including invoices, receipts, and relevant documentation showcasing qualified expenditures. While not required during the claim process, these records may be necessary in case of an audit.

April 15

most common National Tax Day date

For homeowners, completing IRS Form 5695 and attaching it to your federal income tax return is the key to claiming the Solar Tax Credit. Ensure the inclusion of residential energy credit information on Schedule 3 (Form 1040) and file your tax return by the 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 Pennsylvania Solar Tax Credit

The scope of the Pennsylvania Solar Tax Credit extends beyond solar panels, covering all equipment, shipping, and labor expenses. Importantly, there's no cap on the amount you can claim back.

Beyond the federal solar tax credit, Pennsylvania offers additional state-level incentives and rebates for solar installations, further mitigating upfront costs. Delve into our guide on Pennsylvania solar incentives for comprehensive information.

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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