Understanding the West Virginia Solar Tax Credit

The Investment Tax Credit (ITC) stands out as a compelling incentive for solar system owners. What makes it impactful? It empowers you to trim 30% of your expenses! Wondering how to make use of the Solar Tax Credit in West Virginia? Here’s a concise guide.

What exactly is the Solar Tax Credit?

The Solar Investment Tax Credit (ITC) gives businesses and homeowners the opportunity to claim a tax credit equivalent to 30% of the solar panel system’s cost. It’s important to emphasize that the ITC is not a rebate – it directly reduces your owed income tax.

This Solar Tax Credit is open to anyone installing solar panels before December 31, 2034. However, it decreases to 26% in 2033 and further drops to 22% at the beginning of 2034.

How does the West Virginia Solar Tax Credit work?

For instance, if a household invests in a $25,000 solar panel system, they can deduct over $8,000 from their income taxes. This deduction effectively brings down the net cost of the PV system to $17,000. Any remaining credit can be carried over to subsequent years, ensuring you receive the promised 30%.

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To be eligible for the credit, you must own this system — leased systems do not count. The solar PV system must be new or used for the first time and installed in the United States. If claiming for a PV installation on a boat or an RV, put it as your second home.

How to get a solar tax credit in West Virginia?

The Solar Tax Credit is claimed when the installation of the solar system is over. Keep meticulous records of expenses related to it, including invoices, receipts, and other documents. While you won’t need to submit them, they may be necessary in case of an audit.

To claim the tax credit as a homeowner, complete IRS Form 5695 and attach it to your federal income tax return. Include your 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

Advantages of the West Virginia Solar Tax Credit

The cost reduction facilitated by the West Virginia Solar Tax Credit covers all: solar panels, related equipment, shipping, and labor. And there’s no cap on how much you can claim back.

Apart from the federal solar tax credit, West Virginia provides its own state-level incentives and rebates for solar installations, further reducing upfront costs. Explore more in our guide on West Virginia 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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