Solar system owners and prospective buyers are living in a time of great rewards and incentives for going solar. Particularly, New York State is one of the few states in the US that offers a state solar tax credit.
Aside from the federal government’s (currently) 26% Solar Investment Tax Credit, the 25% New York State’s Solar Tax Credit can combine to give you mindboggling levels of savings!
So, let’s discuss how the New York State’s Solar Tax Credit works and how you can get the most out of it.
New York State’s Solar Equipment Tax Credit
New York State residents are fortunate enough to have generous incentives for going solar. Aside from offering net metering, New York State offers the “Solar Energy System Equipment Credit”, also known as New York State’s Solar Tax Credit.
Who is Eligible?
You are eligible to receive New York State’s Solar Tax Credit if you:
- Are a resident of New York State
- Have installed a solar energy system equipment (for heating, cooling, hot water, or electricity generation) on your principal residence in New York State
- Have a tax liability in New York State
- Have entered into a lease for solar use; or entered into a power-purchase agreement (PPA) that spans at least 10 years.
Unlike the federal solar tax credit, NYS’s Solar Tax Credit gives you the opportunity to recoup your solar expenses regardless of whether you purchase your system or go with leasing or PPA.
How Does NYS’s Solar Tax Credit Work?
New York State’s Solar Tax Credit works in a similar manner to the federal solar tax credit, but it has some added benefits.
The state’s tax credit is equal to 25% of your solar system costs, or $5,000 (whichever is lower). Unlike a tax deduction which merely reduces your tax liability and is worth only a fraction of its dollar value, a tax credit is withdrawn directly from your tax bill, dollar-for-dollar.
The tax bill applies to your New York State taxes, and it has the added benefit of being incredibly flexible. You can roll-over the excess credit for up to five years and claim it regardless of whether you own or have a lease/PPA arrangement on your solar system.
While the process is straightforward if you own your solar system, it is slightly different if your system is under lease/PPA. In this case, you may claim the New York State Solar Equipment Tax Credit until you reach your calculated cap at $5,000 or until 15 years have passed (whichever comes first).
The state tax credit is equivalent to 25% of your expenditures on solar energy, i.e., the payments you have made to the company that owns your system and sell you power).
How to Claim NYS’s Solar Tax Credit
You can claim the state’s solar tax credit by filling out form IT-255 when you file your taxes. The New York State Solar Equipment Tax Credit is giving you an incredible opportunity to compound your solar savings.
So, what are you waiting for? With all these incentives in place for going solar, now is the best time to make the shift. Get in touch with our responsive and friendly team at New York State Solar Farm.