Solar tax credit extended

Blackcherry04

Looks like the Solar Property tax credit will be extended . 30% thru 2019 and then a phase down.

http://www.greentechmedia.com/articles/read/congress-is-on-the-verge-of-passing-a-5-year-extension-of-solars-investment

Mountain Don

Maybe change the topic title to include the word "credit".  I don't know if we ordinary members can change the title on our own topics or not?

strawbale

This is good news, but I have a question. I still have $5,000 in federal tax credits left from my March 2010 installation. It was my understanding that I these credits would expire in 2016 if I did not use them by then, that is that I would lose them. Is that the case, or does this recently approved extension also mean that I can keep rolling over and gradually using my existing credits? I am so hoping that is the case!

BB.

I have updated the title.

-Bill

Blackcherry04

Thanks Bill, I was walking out the door when I saw it.

They are voting today on the tax extensions so it will be awhile until the regulations are written. See your CPA or the IRS, but I see no reason to believe that you wouldn't be able to use it in the future.

Mangas

Solar tax credit question. 

For 2015, I replaced my ten year old off grid inverters and charge controllers with new comparable Schneider equipment. 

This year, I may replace my batteries.

Are both of these qualified for the federal solar tax credit or does it apply only to installing for the first time solar equipment?

BB.

As far as I know, new installations only. Repairs do not qualify.

-Bill

Mangas

Thanks Bill.

Dave Angelini

I would disagree!  If one bought new batteries and throws in a couple solar panels on the credit for good measure,
the worst that would happen if there was actually someone competent in the IRS, you would argue your case and at the worst pay the credit back if you lost and if you were audited.

  I know of two similar cases and without giving away private info I would say this is not a problem. The real fear is being audited and you should not make the amount a small one as normal solar systems are over 10,000 dollars and lesser amounts might be the trigger.

When reading IRS 5695 the following is the definition below. It does not say that new only or no repairs. One can get very confused because the residential energy credit with a $ 500 limit is mixed in with 5695. 

My standard disclaimer is the Secretary of state will disclaim and knowledge of my writing this and how do you really know it is me?

"Qualified solar electric property costs. Qualified solar electric property costs are costs for property that uses solar energy to generate electricity for use in your home located in the United States. No costs relating to a solar panel or other property installed as a roof (or portion

thereof) will fail to qualify solely because the property constitutes a structural component of the structure on which it is installed. The home does not have to be your main home.

Qualified solar water heating property costs. Qualified solar water heating property costs are costs for property to heat water for use in your home located in the United States if at least half of the energy used by the solar water heating property for such purpose is derived from the sun. No costs relating to a solar panel or other property installed as a roof (or portion thereof) will fail to qualify solely because the property constitutes a structural component of the structure on which it is installed. To qualify for the credit, the property must be certified for performance by the nonprofit Solar Rating Certification Corporation or a comparable entity endorsed by the government of the state in which the property is installed. The home does not have to be your main home.

Qualified small wind energy property costs. Qualified small wind energy property costs are costs for property that uses a wind turbine to generate electricity for use in connection with your home located in the United States. The home does not have to be your main home

Mountain Don

You have to wonder what the words "original system installation," mean in this document. Scroll down to the paragraph under the Summary heading. 

Mangas

Thanks Dave.

Encouraging and sustaining renewable energy users not dissuading people like us seems to me what would be most important.  I thought that was the whole idea?

Looks like a question for a CPA outfit.

Mountain Don

If the system is 10 years old then there never was a credit already taken, right?  So treat it as a new installation and take the credit now.  That still leaves the question of changing batteries in a year to be looked into. 

Photowhit

Things have changed as they do... minute by minute at times. But in looking into adding/expanding it was okay back  when I was growing my system in late 00's.

Dave Angelini

Mountain Don said:

If the system is 10 years old then there never was a credit already taken, right?  So treat it as a new installation and take the credit now.  That still leaves the question of changing batteries in a year to be looked into. 

I would think that the equipment receipts should be in the year before the credit was taken.  There is language of 12/31. Going back 10 years might be a problem if you were audited.

The CPA's usually screw up 5695 until you show them that there are different lines for the unlimited Photo solar, wind, and domestic solar hot water. 5695 is mostly about the energy efficiency one time $500 credits. It mixes them up.

Dave Angelini

Mangas said:

Thanks Dave.

Encouraging and sustaining renewable energy users not dissuading people like us seems to me what would be most important.  I thought that was the whole idea?

Looks like a question for a CPA outfit.

I think renewable energy credits were for industry but who cares. The point is one needs to do their due diligence and know what you are doing with finances, just like living offgrid. You almost have to know as much as an accountant.

I like Bill's answer as it is alot safer.....I just don't like loosing 30%. The old boy's at Hewlett Packard always said "you owe it to your country to take every credit that you are legally entitled to"

Mangas

Forget it, not worth the hassle. 

Thanks for the input guys.

Masterjoe

If a person has no tax liability and will not have a tax liability for the next 5 years forward, what is the benefit of the 30% tax credit for this individual?

Dave Angelini

There is no benefit. It takes money to make money!

vtmaps

Masterjoe said:

If a person has no tax liability and will not have a tax liability for the next 5 years forward, what is the benefit of the 30% tax credit for this individual?

I carried my solar tax credit for a few years before I found a way to create a tax liability... If you have a 401k or an IRA, convert all or part of it to a Roth IRA.   Use your solar credit to pay the tax.  Later, when you want the money in the Roth, it will not be income.

--vtMaps

Masterjoe

Yes, I realize it takes money to make money.  What I meant was all these solar installers are saying rush now get the solar system installed while the 30% tax credit is still being offered.  But the cast majority of Americans get a refund and I will be forever.  So for people in this situation if the 30% credit means nothing what then is the big rush.  I mean i'm guessing people who get refuds then should not be able to afford solar.

vtmaps

Masterjoe said:

Yes, I realize it takes money to make money.  What I meant was all these solar installers are saying rush now get the solar system installed while the 30% tax credit is still being offered.  But the cast majority of Americans get a refund and I will be forever.  So for people in this situation if the 30% credit means nothing what then is the big rush.  I mean i'm guessing people who get refuds then should not be able to afford solar.

Huh?  refunds has nothing to do with whether you can use your solar tax credit.  What matters is whether you pay income tax.  If you pay income tax, but get a refund, you will get a larger refund (by the amount of your income tax) if you use your solar tax credit to pay the income tax.

--vtMaps

Masterjoe

I have a TSP account.  It just seems to me to be a dupe credit.  The only people who benefit are the ones who would owe taxes.  I think rich people get enough breaks already.  I already threw away $28,000 on a system that has been doing nothing for me for 4 months.  I will never see a payoff.

Mountain Don

I don't consider my wife and I to be classed among the wealthy, the rich. However, we have paid income taxes every year in the past 40+ years, more taxes in some years and less taxes paid in a few others. But we have always owed something. We took the present solar PV tax credit back in 2009 and way back in the mid 80's we also took a piece of that ill-thought through solar tax credit. 

I am not familiar with your $28K system, but surely you must get some benefit?  No?

Dave Angelini

I don't think he does Don.  Past experience and due diligence are factors.
 Moving on what a nice break for the solar Industry.
I am not sure they need it but going out to 2019 will not hurt.