How To Claim The Federal Solar Tax Credit In Oklahoma
Please remember that we are not tax professionals and do not give tax advice. This information is only a general outline of what steps/forms to use when claiming the federal solar tax credit. Please consult a tax consultant before filing.
Tax Benefits Of Going Solar
The federal government is offering a 30% tax credit to reduce the costs of adding rooftop solar panels. With the average home energy system costing upwards of $25,000, this single deduction can offer homeowners huge savings!
Solar Tax Credit Amounts
Adding a rooftop solar system to your home allows you to qualify for a credit of up to 30% of your total cost, including:
Solar PV panels or PV cells
Solar-powered systems that generate electricity or heat water
Contractor labor costs
Permitting fees
Installation costs
Energy storage devices (batteries, generators) charged by solar panels
Tax credits are different from tax deductions. A credit allows you to take the amount directly off your tax payment vs. a deduction which reduces your overall taxable income.
The 30% solar tax credit amount is only available through 2033. After that, the amount will be reduced to 26%.
Solar Tax Credit Limitations
The tax credit can only be claimed on the "original installation" once
Homeowners cannot** claim the solar tax credit multiple times (see below)
Credit and savings do not apply to leads solar systems or fees associated with community solar farms
You can't claim the solar tax credit on rental properties you don't live in
If you live part-time in a rental property you own (say three months out of the year), you can claim the tax credit for the amount of time you were in the home
**If you own multiple homes, you may be able to claim the tax credit for each property - discuss this with a tax professional
Filing Requirements
To claim the solar tax credit, you must file Form 5695 with your annual tax return. Access the form and get instructions on how to complete the form here.
One of the biggest questions we get from homeowners is about total tax liability and what happens if you have a credit larger than what you owe. If you end up with a bigger credit than you have income tax due — ex.a $3,000 credit on a $2,500 tax bill —then you can't use the credit to get money back from the IRS. Instead, you are allowed to carry the credit over to the following tax year.
Solar Tax Credit FAQs
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The short answer is no. Oklahoma homeowners cannot claim the solar tax credit more than once on the same property. However, unused amounts of the solar tax credit can be carried over each year for five years. For example, suppose you own multiple homes and install solar energy systems. In that case, you may be eligible to use the solar tax credit for each property.
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Unfortunately, it does not. The solar tax credit only applies when a homeowner purchases qualifying solar products or energy upgrades. The tax credit cannot be applied to systems that are leased or those that are a part of a community solar farm.
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It's possible that additional rebates for solar could affect your tax credit savings. Click here to access Oklahoma's latest energy efficiency rebates and review your options.
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Yes! As long as you meet the other qualifications (solar panels are purchased and installed on your primary residence), you can still claim the tax credit for the total amount and remain connected to the grid through net metering programs.
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Item descriptionYes! As long as the solar panels generate electricity for your home, they qualify for the solar tax credit. This means they can be on your roof or mounted on the ground of your property.
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Yes! The bank or finance company pays the solar installer when your loan is approved. The finance agreement is a contract, and you must pay the total cost. This means you can claim the solar tax credit even if the payoff date is 25 years later. Additional expenses from financing, like origination fees and extended warranty expenses, are not eligible when calculating your tax credit.
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Additional resources on the solar tax credit for Oklahoma homeowners can be found online in The federal statute and IRS guidance: 26 USC § 25D at www.gpo.gov and "Q&A on Tax Credits for Sections 25C and 25D" at www.irs.gov.
Get A Free Solar Quote In OKC
Curious about how much you can save with the federal solar tax credit? Schedule a free solar quote and let our experts analyze your home and energy needs to calculate your costs and savings. Use the form below to get started!