Q. I’m about to signal a contract to put in photo voltaic panels on my roof. If the panel set up is accomplished earlier than January 1 however the connection to my electrical utility is after January 1, can I declare the federal tax credit score on my 2022 or 2023 federal tax return?
— Proprietor of the home
A. We hope the panel set up went effectively.
This can be a massive process.
The federal residential photo voltaic vitality credit score is a tax credit score that may be claimed on federal earnings taxes for a proportion of the price of putting in a residential photo voltaic photovoltaics (PV) system paid by the taxpayer, based on the Vitality Division web site.
Set up of the system needs to be full in time for the tax yr, mentioned Gerard Papetti, a licensed monetary planner and licensed public accountant at US Monetary Providers in Fairfield.
Photo voltaic PV techniques put in in 2020 and 2021 are eligible for a 26% tax credit score, he mentioned. In August 2022, Congress handed an extension of the Funding Tax Credit score (ITC), elevating it to 30% for installments between 2022 and 2032, he mentioned. Techniques put in on or earlier than December 31, 2019 are additionally eligible for a 30% tax credit score.
“It is going to lower to 26% for techniques put in in 2033 and to 22% for techniques put in in 2034,” he mentioned. “The tax credit score expires starting in 2035 until Congress adjustments it.”
There isn’t a most quantity that may be claimed, he mentioned.
Primarily based on guidelines supplied by the Division of Vitality, so long as the set up is accomplished by 2022 you’ll be able to declare the credit score in your 2022 tax return, Papetti mentioned.
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Karin Worth Mueller wrote the bamboo column for NJ Advance Media and is the founding father of NJMoneyHelp.com. Observe NJMoneyHelp on Twitter @NJMoneyHelp. Search NJMoneyHelp on Fb. Join NJMoneyHelp.comof weekly e-newsletter.