When it comes to solar tax incentives, New York State shines brightly with its own Solar Tax Credit. Because it’s state-specific, this can only be applied to solar installations at primary residences within New York. However, if you’re a NY citizen, you’ll be proud to know that this state-specific perk can save you up to $5,000 on your total solar costs, and is deducted directly from your state taxes.
You may now be asking yourself: what do I need to know about this? How can I take advantage of this and how do you start saving?
We’re glad you asked. Read on to find out.
Curious about your potential savings? Head over to our “Am I Eligible?” page for a personalized solar quote.
What is the New York State Solar Tax Credit?
The New York State Solar Tax Credit is a tax incentive that generously reduces your State Income Taxes by 25% of the cost of your solar energy system.
For instance, if your solar setup costs $20,000, you can slash your state taxes by $5,000 (that’s 25% of $20,000). We should note that this benefit is capped at $5,000, but it’s still nothing to sneeze at. When paired with the Federal Investment Tax Credit (FITC), this state incentive makes solar energy more accessible and affordable than ever.
Credits vs. Deductibles
Like the FITC, the New York State Solar Tax Credit is not a tax deduction, it’s a credit. Here’s the difference:
- Credits reduce the amount you owe in taxes.
- Deductions reduce the amount of income that gets taxed.
For instance, if your taxable income was $100,000 this year, and you were taxed $6,000 for New York taxes, the New York Solar Tax Credit would be subtracted from that $6,000. If your New York Solar Credit was the maximum amount of $5,000, you would only owe $1,000 in state taxes.
Who is Eligible?
To qualify for the New York State Solar Tax Credit, your installation must meet these two criteria:
- The solar system must be installed at your primary residence in New York State.
- The installation must be new. If you’re expanding an existing system, only the new components will be eligible for the credit.
How to Claim Your Credit
Claiming the New York State Solar Tax Credit is a breeze. Claim it by following these steps:
- Complete Form IT-255: This form helps you calculate and claim your credit.
- Submit the form with your New York State tax return.
- Keep all receipts and documentation related to your solar installation in case you need to provide proof of your expenses.
The Perks of the NYS Solar Tax Credit
Is filing for this incentive worth it? Absolutely.
- Significant Savings: By reducing your state tax liability, the credit can dramatically reduce the overall amount spent on a solar installation.
- Promotes Renewable Energy: By going solar, you don’t just cut down on your daily pollution, but you join a nationwide movement toward renewable energy and a longer lasting world. There’s no better time than now.
- Increases Property Value: Last but not least, installing solar panels does help to boost your property value. Homes with solar panels installed sell quicker and for more money.
Let’s See Those Savings Shine!
We hope this guide helps you grasp the powerful benefits of the New York State Solar Tax Credit. Are you a New Yorker who’s ready to switch to renewable energy? Give us a call at (929) 999-1872 or fill out the form below.
However, if you had a deduction of $5,000 (instead of a credit), that would mean only $95,000 of your income would be taxed.