How to Claim the ITC for Solar Systems and Batteries Installed in Utah and Wyoming During 2024

The Investment Tax Credit (ITC) is a valuable federal incentive that can significantly reduce the cost of solar energy and battery storage systems. If you installed or plan to install a solar system or battery storage in Utah or Wyoming during 2024, here’s a step-by-step guide to help you claim the ITC on your federal taxes.

What is the ITC?

The ITC, also known as the Federal Solar Tax Credit, allows homeowners and businesses to deduct a percentage of the cost of installing a solar energy system and battery storage from their federal taxes. For systems installed in 2024, the ITC rate is set at 30% of the total installation cost.

Step-by-Step Guide to Claiming the ITC

1. Confirm Eligibility

To claim the ITC, your system must meet the following criteria:

• Type of Property: Installed on a residential or commercial property you own.
• Year of Installation: Fully operational and connected to the grid in 2024.
• Battery Storage: If included, the battery must be charged at least 75% by renewable energy sources like solar panels.

Ensure you have invoices and documentation from your installer, such as a receipt, contract, and proof of system commissioning.

2. Collect Necessary Information

Gather the following documents before filing your taxes:

• Itemized Invoice: Shows the total cost of the system, including labor, equipment, permits, and other installation-related expenses.
• Contractor Details: Information about your solar installer, including their name, address, and any relevant certifications.
• Proof of Payment: Bank statements or payment receipts showing you’ve paid for the system.

3. File IRS Form 5695

The ITC is claimed using IRS Form 5695: Residential Energy Credits. Here’s how to fill it out:

• Part I, Line 1: Enter the total cost of your solar and battery installation.
• Part I, Line 6: Multiply the total cost by 0.30 (30%) to calculate your credit.
• Transfer the credit amount to Schedule 3 (Form 1040) to include it in your overall tax return.

For businesses, the credit is claimed using Form 3468: Investment Credit.

4. Consult a Tax Professional

Navigating tax forms and ensuring compliance can be challenging. A tax professional can verify your calculations and maximize your return. This is especially important for systems with unique configurations, such as hybrid systems or systems installed across multiple properties.

Why Claim the ITC?

Claiming the ITC can lead to substantial savings. For example, if your system costs $20,000, the 30% credit allows you to deduct $6,000 from your federal tax liability. When combined with possible utility incentives, these savings make solar and battery installations more affordable than ever.

Tips for a Smooth Process

• Work with an Experienced Installer: Reputable installers provide detailed documentation that simplifies the ITC claim process.
• Keep Records Safe: Store all receipts, contracts, and forms for at least five years in case of an IRS audit.
• Double-Check Eligibility: Ensure your system qualifies for the full ITC by meeting federal guidelines.

By taking advantage of the ITC, Utah and Wyoming residents can enjoy significant savings while transitioning to renewable energy. Investing in solar and battery storage not only reduces your carbon footprint but also increases your energy independence and property value. Don’t let this opportunity pass—claim your credit and reap the benefits of solar energy today!

*Please note: We are not tax or accounting professionals. While we strive to provide helpful information, we recommend consulting a qualified tax professional for advice tailored to your specific tax situation.*