Can I Rollover Unused Solar Tax Credits Into the Next Year?
You’ve gone solar. You’re saving on energy bills, lowering your carbon footprint, and maybe even enjoying the smug satisfaction of watching your electric meter run backward. But when it comes to tax season, you might find yourself wondering: “What happens if I don’t use all my solar tax credits this year? Can I roll them over into the next year?”
Short answer: Yes, you can. But let’s be careful, because tax credits aren’t exactly known for their straightforward simplicity. Luckily, we’re here to help.
What Are Solar Tax Credits?
First, a quick refresher. Solar tax credits—officially called the Investment Tax Credit (ITC)—are your reward for taking the leap into renewable energy. The federal incentive lets you claim a percentage of your solar installation costs on your taxes. For systems installed in 2024, you can deduct 30% of the total cost from your federal taxes. That’s a huge deal.
But here’s the catch: tax credits only apply to what you owe Uncle Sam. If your federal tax bill is smaller than your total credit, you won’t get a check for the difference. Instead, you’re left with unused credits. Which brings us to the good news.
Rollover? Yes, Please.
The federal solar tax credit allows for rollovers into future tax years. So, if you install solar panels this year but your tax bill isn’t hefty enough to absorb the entire credit, you don’t lose out. You can carry those unused credits forward and apply them to next year’s taxes. It’s a pause on your savings, until you need them. So, for example:
- Your solar system costs $25,000.
- 30% of that cost equals a $7,500 tax credit.
- If you only owe $5,000 in federal taxes this year, you can use $5,000 of your credit now and roll over the remaining $2,500 to next year.
No stress. No loss. Just a little patience.
How Long Can I Keep Rolling Them Over?
Good question. The ITC doesn’t have an infinite shelf life, but it’s generous. You can roll over unused solar tax credits for up to five years. That’s five tax seasons to make the most of your investment. For most homeowners, that’s plenty of time to claim every penny of their credit.
Quick Tips to Make the Most of Your Solar Tax Credit
Rolling over unused credits gives Tampa homeowners the flexibility to maximize their benefits, even if their tax liability doesn’t line up perfectly in the first year. No pressure to “use it or lose it.” Just peace of mind as you soak up the savings. Make the most of them by:
- Talk to a Tax Pro. Tax codes can get tricky. A professional can help you navigate your credit and ensure you’re claiming everything you’re entitled to.
- Keep Records. Save receipts, contracts, and proof of payment for your solar installation. You’ll need them when it’s time to file.
- Plan Ahead. If you anticipate a low tax liability this year, remember that your credits will still be there waiting next year.
The Future Is Bright—Save With Solar
Unused solar tax credits don’t have to be a source of stress. They’re a tool—one that helps you get the full financial reward of going solar, whether it happens all at once or over several years. So, go ahead. Enjoy your lower energy bills and your reduced carbon footprint. Your solar savings aren’t going anywhere!
Ready to roll those credits into a brighter, sunnier future? We thought so. Solar Bear of Tampa can help you maximize your solar benefits, from making sure your installation qualifies for the ITC to helping you plan for tax season. Reach out today at (727) 471-7442—let’s turn your solar investment into long-term savings and peace of mind.