Solar Energy Systems Tax Credit (Personal)

February 22, 2023

Summary

Note: This program is no longer available as of January 1, 2022.

Iowa offers an individual tax credit for solar energy systems. Specifically, the law allows individuals to claim a state tax credit worth 50% of the Federal Residential Tax Credit Each taxpayer may claim up to $5,000 for residential systems and $20,000 for commercial systems under this program, and any excess credits may be carried over for up to 10 years.

An individual may claim the tax credit allowed an LLC, S corporation, trust, estate, or partnership that elects to have the income taxed directly to the individual. The amount that the individual can claim is based upon the share of the individual's earnings of the corporate entity.

A taxpayer may claim a credit for each separate and distinct solar installation. The cumulative value of the tax credits claimed by applicants under this program and the corporate tax credit is limited to $5,000,000 per year, with a minimum of $1,000,000 reserved for credits for residential solar installations. Because of this limit, a taxpayer must complete an application for each separate and distinct solar installation to reserve the tax credit. The application for the Iowa credit cannot be made for individuals until the installation of the solar energy system is complete. An application for the Iowa credit for businesses cannot be made until the installation of the solar system is complete and the system is placed in service. Credits will be reserved on a first-come, first-serve basis.

Taxpayers taking a credit under this provision cannot claim a credit under the Iowa Production Tax Credit.

Program Overview

Implementing Sector:	State
Category:	Financial Incentive
State:	Iowa
Incentive Type:	Personal Tax Credit
Web Site:	https://tax.iowa.gov/solar-energy-system-tax-credits
Administrator:	Iowa Department of Revenue
Start Date:
Eligible Renewable/Other Technologies:	Solar Water Heat Solar Photovoltaics
Incentive Amount:	50% of Federal ITC (15% for 2019 and earlier, 13% for 2020, 11% for 2021, 5% for 2022, 0% for 2023 and later).
Maximum Incentive:	$5,000
Carryover Provisions:	Excess credit may be taken for up to 10 years

Incentives

This program has 1 incentives

Technologies:	Solar Water Heat, Solar Photovoltaics
Sectors:	Residential
Parameters:	The incentive has a minimum of $5000.00

Authorities

Name:	Iowa Code §422.11L
Date Enacted:	05/25/2012
Effective Date:	01/01/2012

Name:	701 IAC 42.48
Date Enacted:	10/03/2012
Effective Date:	11/07/2012

Name:	H.F. 645
Date Enacted:	06/26/2015
Effective Date:	01/01/2015

Contact

Name:	Iowa Department of Revenue
Address:	Hoover State Office Building - 1st Floor 1305 E. Walnut Des Moines IA 50319
Phone:	(800) 367-3388

This information is sourced from DSIRE; the most comprehensive source of information on incentives and policies that support renewables and energy efficiency in the United States. Established in 1995, DSIRE is operated by the N.C. Clean Energy Technology Center at N.C. State University.