Below is a summary of the available Federal and State of Arizona solar tax credits for both individuals and businesses.
Solar Tax Credits for Individuals
Federal Personal Tax Credit
Individuals receive a federal tax credit of 30% of the total solar system cost. The credit should be claimed in the year the system is placed into service. Additionally, if the amount of the credit exceeds a taxpayer’s liability in a certain year, the unused portion of the credit may be carried forward to following tax years. This tax credit is good through 2032.
See details about the federal personal tax credit here.
Arizona Personal Tax Credit
Individuals in Arizona receive a tax credit for 25% of the system cost, up to $1,000. Like the federal credit, this credit should be claimed in the year the system is placed into service. Also, if the credit claimed exceeds a taxpayer’s liability, the unused portion of the credit may be carried forward for up to five years.
See details about the Arizona personal tax credit here.
Solar Tax Credits for Businesses
Federal Business Energy Investment Tax Credit
A business receives a tax credit for 30% of the system cost for equipment placed in service up to December 31, 2032.
See details about the federal business energy investment tax credit here.
Businesses also may claim a depreciation deduction, the Corporate Modified Accelerated Cost-Recovery System. Solar electric systems installed at a business qualify for a five year accelerated depreciation.
See details about the federal corporate depreciation incentive here.