South Carolina Solar Tax Credit

A good discount makes any purchase even better, and solar panels are no exception. You can save up to 30% by taking advantage of the Investment Tax Credit. Here is a quick article on how to claim Solar Tax Credit in South Carolina.

What is the Solar Tax Credit?

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

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

How does the South Carolina Solar Tax Credit work in practice?

Consider a household installing a $20,000 solar panel system. With the ITC, they can subtract $6,000 from their income taxes, bringing the net cost down to $14,000. Any remaining credit can be carried over to subsequent years, ensuring you receive the promised 30% incentive.

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To qualify for the ITC, ownership of the solar energy system is crucial — leased systems do not meet the criteria. The system must be installed in the United States and must be either new or used for the first time.

How do I get a solar tax credit in South Carolina?

Claiming the Solar Tax Credit in California occurs post-installation. Maintain meticulous records of all expenses related to the solar energy system, including invoices, receipts, and relevant documentation. While these documents are not initially submitted, they may be required in case of an audit.

Homeowners need to complete IRS Form 5695 and attach it to their 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 South Carolina Solar Tax Credit

The South Carolina Solar Tax Credit covers not only solar panels but also associated equipment, shipping, and labor expenses. There's no cap on the claimed amount.

Beyond the federal incentive, South Carolina offers state-level incentives and rebates for solar installations, further alleviating upfront costs. Explore our guide on South Carolina solar incentives for more details.

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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