Yes, you can typically claim both a federal tax credit and rebates for the same solar energy project. Here’s how they work together under current policies:
Federal Tax Credit (30%)
The Residential Clean Energy Credit provides a 30% tax credit for solar installations and battery storage (no income limits or maximum cap). For example, a $35,000 system would qualify for a $10,500 credit ($35,000 × 30%).
Rebates and State Incentives
Most rebates (e.g., local utility incentives, state programs) reduce the upfront cost of your system. These are independent of the federal tax credit and do not conflict with it. For instance:
- Lower upfront expenses from rebates directly decrease your total project cost.
- The 30% tax credit is then applied to the remaining balance after rebates.
Key Considerations
- No double-dipping: Rebates reduce the basis for calculating the tax credit. For example, a $30,000 system with a $5,000 rebate would have a $25,000 basis, resulting in a $7,500 credit ($25,000 × 30%).
- Ownership requirement: You must own the system (not lease) to claim the federal credit.
- Rollover credits: Unused portions of the 30% credit can be applied to future tax years.
For precise calculations, consult a tax professional to account for your specific rebates and system costs.
Original article by NenPower, If reposted, please credit the source: https://nenpower.com/blog/can-i-claim-both-a-tax-credit-and-a-rebate-for-the-same-solar-energy-project/
