Washington Solar Tax Credit

The Investment Tax Credit (ITC) stands out as one of the best incentives for solar system owners. Why? It empowers you to reduce your expenses by a third! How is that possible? Here is a quick guide on how to claim Solar Tax Credit in Washington.

What is the Solar Tax Credit?

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

Available until December 31, 2034, the Solar Tax Credit decreases to 26% in 2033 and further drops to 22% in the beginning of 2034.

How does the Washington Solar Tax Credit work?

Consider a household installing a $20,000 solar panel system. By subtracting $6,000 from their income taxes, the net cost of the PV system reduces to $14,000. The remaining credit can be carried over to subsequent years, virtually guaranteeing the promised 30% incentive.

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Ownership of the solar energy system is mandatory; leased systems do not qualify. The solar PV system must be new or used for the first time and installed in the United States. For PV installations on boats or RVs, designate them as your second home.

How do I get a solar tax credit in Washington?

After installing your solar system, keep detailed records of installation expenses, including invoices and receipts. While not required for submission, these documents may be necessary in case of an audit.

Complete IRS Form 5695, attach it to your federal income tax return, add your residential energy credit information to Schedule 3 (Form 1040), file your tax return by the applicable deadline, and here you have it.

Need help? Follow our guide!

We cover filling out the forms for claiming ITC step by step

Step-by-step guide

Benefits of the Washington Solar Tax Credit

This credit goes beyond reducing the cost of solar panels; it covers all equipment, shipping, and labor expenses without a claim cap.

Additionally, Washington offers state-level incentives and rebates, detailed in our guide on Washington solar incentives.

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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