One of the lesser-known benefits of the latest COVID relief package recently passed by Congress is the restoration of the 30% federal solar tax credit for homeowners. This extends the previous deadline for this tax credit by two years, meaning that there’s no better time to invest in solar panels for your home. Intelligent Design Air Conditioning, Plumbing & Solar can help you take advantage of Tax Solar Credit in Southern Arizona.
Which Tax Solar Credits are available for homeowners?Along with the renewed federal tax credit, there are some other local tax benefits Arizona homeowners can utilize. State and federal benefits can be used at the same time, so you’ll optimize your total savings for your installation costs.
- Federal Solar Tax Credit – The federal solar tax credit, or Investment Tax Credit (ITC), allows homeowners to deduct 30% of the cost of installing a solar energy system from their federal taxes. On average, homeowners save about $9,000 through the solar ITC when installing whole home solar systems. To qualify, construction must begin on your solar installation in 2020, 2021, or 2022. Projects beginning construction in 2023 are eligible for a 22% ITC. The rate will drop to 10% thereafter. Additionally, homeowners must purchase their solar systems outright in cash or through a solar loan. They must also have enough income for the tax credit to be meaningful as a deduction.
- Residential Arizona Solar Tax Credit – As an Arizona homeowner, you may save even more by deducting 25% of the cost of your solar panels—up to $1,000—from your personal income taxes the same year you install your system. These savings are stackable with the federal ITC. Solar Tax Incentives are a great way to build a residential solar power system with help from the U.S. Government
- Solar Equipment Sales Tax Exemption – Thanks to the Solar Equipment Sales Tax exemption, homeowners do not face the burden of sales tax on any part of your solar equipment purchase. In addition, installing solar panels will not increase the property tax on your home, even though your home will increase in value. Additional Solar Tax Incentives make it easier to get your Solar System built and pay less taxes