Income Tax Credit for Residential Solar Devices

Arizona Department of Revenue (ADOR) is reminding homeowners who installed a solar energy device in their residential home during 2021 to submit Form 310, Credit for Solar Energy Devices with their individual income tax return and Form 301, Nonrefundable Individual Tax Credits and Recapture.

ADOR defines a solar energy device as a system or series of mechanisms which collect and transfer solar generated energy, and which are designed primarily to:

  • Provide heating
  • Provide cooling
  • Produce electrical power
  • Produce mechanical power
  • Provide solar daylighting, or
  • Provide any combination of the above by means of collecting and transferring solar generated energy into such uses either by active or passive means, including wind generator systems that produce electricity

Arizona law provides a solar energy credit for buying and installing a solar energy device at 25 percent of the cost, including installation, or $1,000, whichever is less. If another device is installed in a later year, the cumulative credit cannot exceed $1,000 for the same residence.

The Renewable Energy Production tax credit is for a qualified energy generator that has at least five megawatts of generating capacity and is not for a residential application. No preapproval is required for an individual income tax credit for a residential Solar Energy Device tax credit that is claimed on Form 310.

If you installed any of the above solar energy devices in 2021, you will want to file for this income tax credit. R&A can help—give us a call.

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About this Author

Laura specializes in income tax return preparation, compliance, and research for individuals and businesses. She also is experienced in preparing compiled and reviewed financial statements, individual and S-Corporation taxation, multi-state taxation, and income tax credits including the R&D credit.