New legislation for better Federal tax rebate

Geek
Geek Solar Expert Posts: 32 ✭
in General Solar Power Topics #1
Guys, I understand the new legislation will remove the $2k cap for residential installs next year, the rebate will be up to 30% then.

My system will be installed in a couple weeks but the company told me they would not submit the paperwork to electric company to interconnect until late December so the connection will happen in Jan.09 and I can then qualify for the new tax rebate incentive.

I am getting mix feedback.
Someone said that the system must be installed in 09 because receipts MAY need to be sent in to IRS to prove the purchase, so if I paid in 08 then I won't qualify.

Someone else said that the interconnection is what really matters (when system goes live), not when the system is installed.

I need the knowledgeable people here to help me on this.8)
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Comments

  • Geek
    Geek Solar Expert Posts: 32 ✭
    #2
    Re: New legislation for better Federal tax rebate

    This is a copy/paste from wind-sun website:

    "However, for systems put "into service" between 2009 and 2016, the credit remains at 30%, whle the cap of $2000 is removed for residential systems. That means that for solar electric systems put into service between Jan 1 2009 and Dec 31 2016, you will be able to get back 30% of the total cost of the system, with no cap for residential systems.

    What "put into service" means is basically when the system goes live, or operational, not when it was purchased. You can purchase solar electric systems now, but you might want to wait until Jan 1 2009 to flip the ON switch.    "

    Here's the link:
    http://store.solar-electric.com/soentaxcr.html

    ..
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  • BB.
    BB. Super Moderators, Administrators Posts: 33,613 admin
    #3
    Re: New legislation for better Federal tax rebate

    You might ask your installer if you can hold $100 until Jan 1 and then "finish the purchase" in the new tax year--if you believe that when the system is "bought" is a criteria for the tax break.

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
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  • Geek
    Geek Solar Expert Posts: 32 ✭
    #4
    Re: New legislation for better Federal tax rebate

    thanks Bill, here's another excerpt from the Q/A document posted on the website:

    "8. If I begin a residential installation now, can the lifted cap apply to this project?
    Answer: That depends on whether the installation is completed after
    December 31, 2008. Section 25D(e)eigth(A) provides in general that an
    expenditure with respect to an item shall be treated as made when the
    original installation of the item is completed. In other words, the taxpayer
    may claim the credit as of the date that the installation of the residential
    solar electric property is completed and the property is placed into service.
    If an installation is begun in 2008, but the property is not placed into
    service until after December 31, 2008, the taxpayer may claim the credit
    for 30% of the expenditures made with regard to the installation.    "

    Not sure exactly how and which criteria Win-Sun compiled these Q/A but I guess this statement indicates my system will qualify if I put it into service in 09.

    Everyone agree?
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  • BB.
    BB. Super Moderators, Administrators Posts: 33,613 admin
    #5
    Re: New legislation for better Federal tax rebate

    If that is the case, a signed "final" building/electrical inspection report / approval for service receipt from the utility dated 2009 should be perfect for your needs (not speaking as a CPA or IRS auditor)...

    I would keep a copy of your research (tax code stanzas and such) in your tax files in case they do an audit--may keep penalties down (not that I expect any problems--just to show due diligence).

    -Bill
    Near San Francisco California: 3.5kWatt Grid Tied Solar power system+small backup genset
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