tax credit question

Options
alter
alter Registered Users Posts: 31 ✭✭✭
I'm aware of the 30% federal tax credit and the need to keep receipts, however in order to qualify must the house you install the system in be in your name, or is there no requirement for that? I'm having trouble finding the answer so thought someone here might know. Thanks!

Comments

  • foosman
    foosman Solar Expert Posts: 38
    Options
    Re: tax credit question

    Internal Revenue Code:Sec. 25D. Residential Energy Efficient Property:

    2) QUALIFIED SOLAR ELECTRIC PROPERTY EXPENDITURE - The term `qualified
    solar electric property expenditure' means an expenditure for
    property which uses solar energy to generate electricity for use
    in a dwelling unit located in the United States and used as a
    residence by the taxpayer.

    I believe it just needs to be your residence.
  • alter
    alter Registered Users Posts: 31 ✭✭✭
    Options
    Re: tax credit question

    Hey foosman thanks for finding that for me...that brings me to yet another question though. When they say residence I wonder if that could include part-time residence or if it implies primary residence?
  • BB.
    BB. Super Moderators, Administrators Posts: 33,478 admin
    Options
    Re: tax credit question

    One "general" suggestion about residences...

    Many (most?) of our law makers have "two homes" -- one "real home" and one in-district address (or original home).

    So, many of the tax laws are written to allow the state and federal legislators to take advantages of various breaks for "both homes" (aka vacation home, etc.).

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • gpt
    gpt Registered Users Posts: 18
    Options
    Re: tax credit question
    alter wrote: »
    I'm aware of the 30% federal tax credit and the need to keep receipts, however in order to qualify must the house you install the system in be in your name, or is there no requirement for that? I'm having trouble finding the answer so thought someone here might know. Thanks!

    Looks like they will be doing a grant instead of tax credits.

    Treasury, DOE Release Guidelines For Renewable Energy Cash Grant Program
    in News Departments > Policy Watch
    by Jessica Lillian on Thursday 09 July 2009


    The U.S. Department of the Treasury and the Department of Energy (DOE) have released the long-awaited guidelines for the $3 billion renewable energy grant program created through the American Recovery and Reinvestment Act.

    The program provides direct payments - in lieu of tax credits - equal to 30% of the cost of solar property placed in service during 2009 and 2010. According to the Treasury and the DOE, the initiative will offer payments to an estimated 5,000 solar and other renewable energy production facilities.

    "The renewable energy program provides another important avenue for the Recovery Act to contribute to economic development in communities around the country," said Treasury Secretary Tim Geithner. "It will provide additional stimulus to economies in urban and rural America by helping to develop domestic sources of clean energy."

    The Treasury and the DOE have published the program's terms, conditions and guidance, as well as a sample application, on the Treasury's Web site to assist applicants in preparing materials in advance of the Web-based application's actual release.

    “The Treasury guidelines allow solar developers to prepare formal applications that will be accepted at a later date,” Rhone Resch, president and CEO of the Solar Energy Industries Association, said in a statement. He called the grant program a "critical alternative" to the solar investment tax credit market - but noted that further action is needed.

    "With delays in releasing the Treasury's and other guidelines, we call on Congress to include a one-year extension of the grant program project sunset date in the energy bill currently being debated so that the program meets the intended goals for jobs and investment," Resch stated.

    In the meantime, the news of the guidelines' release was eagerly welcomed by major solar players.

    "This is something we've been waiting for," Chris O'Brien, head of market development at Oerlikon Solar, told Solar Industry. "It will be an important catalyst for accelerating the U.S. market."

    "The collapse of the tax-equity market had certainly been a big factor in slowing market growth in the U.S.," he noted, adding that he anticipates a "significant pickup in demand" as a result of the Treasury's program.
  • foosman
    foosman Solar Expert Posts: 38
    Options
    Re: tax credit question

    Here is a link to the tax code:
    http://www.novoco.com/energy/resource_files/irs_guidance/irc/section_25D.pdf

    I'm not sure, but I would imagine that primary or full-time residence is not a requirement...it simply needs to be a residence of yours.
  • Solar Guppy
    Solar Guppy Solar Expert Posts: 1,989 ✭✭✭
    Options
    Re: tax credit question

    The Tax credits haven't gone away, the grant is an option for business to recover the investment before waiting for the annual tax filing. One still can't apply, all that has been done is to put online two documents, an outline and a sample application.

    At this time, it looks like just using the tax credits is the route I'll take this year as it looks like best case it would be 3 months from application ( which isn't even available ) to payment, so its not going to be faster to get a grant.
  • solarix
    solarix Solar Expert Posts: 713 ✭✭
    Options
    Re: tax credit question

    On the subject of tax credits - if a homeowner uses financing to pay for a PV system, do the tax credits apply to the purchase price of the system or just the yearly payments?
  • BB.
    BB. Super Moderators, Administrators Posts: 33,478 admin
    Options
    Re: tax credit question

    My guess, if you "own" the system and take out a loan to pay for it (even if vendor financed)--you can take the full cost of the system in the year purchase/installation is made (double check on that--when permits are signed and system is in production is when the deductions/credits may be taken?).

    The interest itself would be subject to the other standard limitations on deductions--i.e., loans against homes for home improvement can generally be deducted in some form. Loans against personal property (cars, etc.) or unsecured loan interest generally cannot be deducted.

    If it is some sort of lease or lease purchase (like Citizenre) -- that is a whole other level of tax law that probably needs accountants and business based deductions.

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
  • gpt
    gpt Registered Users Posts: 18
    Options
    Re: tax credit question

    I was wondering about the Fed Tax Credit. Is it 30% of the total installation cost or is it 30% of the cost AFTER state incentives? Thanks
  • Solar Guppy
    Solar Guppy Solar Expert Posts: 1,989 ✭✭✭
    Options
    Re: tax credit question

    For 2009, its 30% of the total cost and you don't have to deduct any state incentives received ... which was different for 2008 when you did.
  • gpt
    gpt Registered Users Posts: 18
    Options
    Re: tax credit question

    Thanks for the clarification.