Please note: Atmos is not a tax consultant and does not provide tax advice. To understand the implications of the ITC for your situation, please consult a tax advisor or perform the necessary research.
Pursuant to the IRS, a tax credit is a dollar-for-dollar amount a taxpayer can claim on their tax return to reduce the income tax they owe. Eligible taxpayers can use them to reduce their tax bill and potentially increase their refund. The ITC can be rolled forward into future periods.
Importantly, since tax credits reduce federal income tax on a dollar-for-dollar basis, tax credits are generally only useful for individuals with a tax liability. Homeowners without an ongoing federal tax liability should reevaluate the benefit of a solar installation or consult an accredited professional.
Size of your Investment Tax Credit
Pursuant to IRS guidelines extended through the Inflation Reduction Act, the ITC is sized to equal 30% of the total eligible costs of your installed project. For purposes of your solar loan, the size of the ITC linked to your solar loan is 30% of the Financed Amount stated in your loan agreement.
You may be eligible for a larger tax credit if additional costs were incurred but not included in your loan, or less if ineligible costs were incorporated into your solar loan. Note: Atmos is not responsible for and does not audit the eligibility of all costs incorporated into your solar loan, and relies upon the due diligence of its customers and their solar installation partners.
Eligible costs for the ITC, among other expenses, include:
- Cost of solar panels;
- Labor costs for installation, including permitting fees, inspection costs, and developer fees;
- Any additional solar equipment, like inverters, wiring, and mounting hardware;
- Energy storage systems rated three kilowatt-hours (kWh) or greater (starting in 2023);
- Sales taxes on eligible expenses.