Is This the Year to Lower Your Taxes While Helping the Environment?
There is growing and even renewed interest in our country about investing in solar energy technologies. The solar investment tax credit (ITC) can be claimed against federal tax liabilities (corporate or personal) for a percentage of the cost of a solar photovoltaic (PV) system placed into service during the tax year. The amount of the credit varies by year. It is based on a sliding schedule authorized by Congress in December 2020, as part of legislation extending existing federal tax credits.
Panel systems purchased prior to 2020 for commercial solar projects are “grandfathered” at the commencing construction in 2020-2022, 22% for systems commencing construction in 2023, and 10% for systems commencing construction in 2024 or later. Any PV system created after 2025, regardless of when it construction commenced, will only be eligible for a maximum tax credit of 10%.
