Renewable Energy Investment Tax Credit
The Renewable Energy Investment Tax Credit (ITC) is a federal tax incentive that allows individuals and businesses to deduct a significant percentage of the cost of installing renewable energy systems from their federal taxes.
The ITC applies to various renewable energy technologies, including solar, wind, geothermal, and fuel cells. The credit is designed to promote the adoption of clean energy technologies and reduce dependence on fossil fuels.
For example, if a business invests $100,000 in a solar energy system and the current ITC rate is 26%, the business can claim a tax credit of $26,000 when filing their federal tax return. This credit can be carried forward to future tax years if the tax liability in the year of installation is not sufficient to absorb the entire credit.
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