By Theresa Ficazzola
President Biden’s Inflation Reduction Act, which was signed into law on August 16, 2022, makes going solar even more affordable for homeowners.
The solar Federal Tax Credit, which fell to 26% this year and was scheduled to end in 2024, has been increased to 30% beginning right now and will last for at least the next 10 years.
So exactly what does this mean for you if you decide to install solar panels on your roof? It means an increase of 4% on your Federal Tax Credit, when you file your taxes next spring, regardless of where you live.
As an example, if your system’s contract price for a complete home solar panel system was $40,000, you will receive an extra $1,600 on your Federal Tax Refund that you can keep for yourself, increasing your total tax credit to $12,000. So, that system that cost $40,000 only costs you $28,000. And if you live in NYC, there are additional incentives that reduce the cost of solar.
New York Residents
Federal Investment Tax Credit: You will receive a 30% Federal Tax Credit when you file your Federal income taxes. Just complete Form 5695, which is used to calculate your residential energy credit. It must be submitted alongside Form 1040 with your Federal income tax return.
New York State Tax Credit: All NY State homeowners receive a one-time tax credit of up to $5,000 the year their rooftop solar panels are installed. So that’s another reduction in the cost of a solar power system. Just complete Form IT-255 when filing your New York State income tax return.
New York City Property Tax Abatement: As a NYC resident, you are also entitled to an additional 4-year property tax abatement of 20% of the cost of your solar power system up to $62,500. To receive this abatement, there is nothing you need to do. If SI Solar is your solar panel installation expert, we would file for the rebate on your behalf.
Sales Tax Exemption: Unlike most things you purchase, you don’t pay any sales tax on any solar energy system equipment and supplies.
New Jersey Residents
Federal Investment Tax Credit: You will receive a 30% Federal Tax Credit when you file your Federal income taxes. Just complete Form 5695, which is used to calculate your residential energy credit. It must be submitted alongside Form 1040 with your federal income tax return.
Sales Tax Exemption: Unlike most things you purchase, you don’t pay any sales tax on any solar energy system equipment and supplies.
There’s no doubt that many Americans who have been thinking about going solar will now take advantage of these generous incentives. So, don’t delay. Call SI Solar today to see how you can benefit from producing your own clean energy, while putting more money in your pocket.
In addition to the cost savings, you’ll be doing your part to help the planet as the President has a goal to reduce greenhouse gas emissions by about 40% by 2030.
Summary of the Inflation Reduction Act
In addition to the increase of the solar Federal Tax Credit, the Inflation Reduction Act offers:
- $369 billion in direct investment to ensure energy security, reduce carbon emissions, increase energy innovation and support environmental justice objectives
- rebates to buy heat pumps or other energy efficient home appliances
- up to $7,500 in tax credits for new electric vehicles
- up to $4,000 for the purchase of a used electric vehicle
- the creation of good paying jobs in the energy field
- $1 billion grant program to make affordable housing more energy efficient
- $60 billion for growing renewable energy infrastructure in manufacturing
- incentives for the build out of electric vehicle charging networks
SI Solar for New York and New Jersey Residents
Call SI Solar today to find out how you can benefit from your own solar panels for your home in New York or New Jersey and how you can take advantage of the new, expanded tax credits outlined in the Inflation Reduction Act.
