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 2019.
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, 2019.
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.
Arizona Corporate Tax Credit
Arizona will give a business a tax credit for 10% of the system cost up to $25,000 for any one building in the same year and $50,000 per business in total credits in one year. This credit must be applied for in the same year as the installation. Don’t wait until you file your taxes to start the process or you may not be eligible for the credit. These funds are limited annually so you must apply early at the AZ Commerce website.
See details about the Arizona corporate tax credit here.