30% Federal Solar Tax Credit

tarbe · #1 07/29/12, 07:03 PM

What sort of documentation is required, in order to claim this credit?

If one is doing a self-install, do you just need the invoices for the system components?

Do self-installs even qualify?

I will go to IRS.gov to search for answers. If you don't hear from me in a week, send the cavalry to find me!

In the mean time, if you know the answers, I'd love to know!

Tim

rsbhunter · #2 07/29/12, 07:33 PM

DITTO!!!! Have about $7000.00 equipment waiting for a cabin to be built...what are the requirements? Purchase, install, ???????rsbhunter

TnAndy · #3 07/30/12, 06:31 AM

You don't need any documentation to FILE.....you simply plug in the number and claim the credit.....but you'll have to have it if you're audited....so keep it in a folder all together ready to go for years after you file.

You can self install, but you only can claim actual expenses for the equipment and related items......for example, if you pole mounted, the concrete for the base the pole went in is part of the system. I rather seriously doubt you could claim " I had to build a garage to have a roof to mount the panels", though.

RSB: The requirement is the system be "placed in service" the year you claim the credit......not simply you bought a pile of stuff and have it sitting around. On a grid tied system, that would be easy to document, as you'd have some sort of paperwork/permit/etc from the local utility as to when you connected your system to them.

On an off grid system, you could probably "fudge" it a bit, as you're probably the only one that would know when the switch was ACTUALLY flipped, but proceed at your own peril if you plan to play games with the IRS.

PLUS, the "$7,000" you've spent so far is most likely not nearly all you'll need to spend....if nothing else, you'll find wire, batteries, this/that/etc. you'll need. So if you claimed the 7k this year, and then claimed the other next year, it would be kinda obvious you had NOT placed it in service this year when you needed pieces like battery cables ( you won't know the actual length of them until you physically put the stuff in place) to finish it, and bought them a year later....

I've claimed it on 3 different years so far as I put my initial system in place, then added to it twice.

SolarGary · #4 07/30/12, 10:31 AM

Hi,
My experience was exactly what Andy described.
You need to keep your paperwork for the system in case you are audited.

My systems are DIY and this was no problem.

I actually did get questioned on my state tax credit because I installed separate renewable energy systems two years in a row and claimed a credit for each. Once I showed them it was two separate systems they were fine with it.

If its a solar water heating system, the collectors have to be certified by the SRCC -- as far as I know that's the only requirement.

Be sure you also check for rebate programs in your state: DSIRE: DSIRE Home Database of Energy Efficiency, Renewable Energy and Solar Incentives, Rebates and Programs and Policy

Gary

Jim-mi · #5 07/30/12, 11:28 AM

Of course it it your choice, but I have chosen NOT to have the gubermint have a hand in my pocket with all those come on rebate temptations.

My system is mine alone . . .And I have NO use for gubermint intervention........

Your choice

ET1 SS · #6 07/30/12, 06:26 PM

We are putting in Solar panels now regardless of whether we get tax credits or not.

Micheal · #7 07/30/12, 08:49 PM

Please explain the tax credit.....
If'n I file but don't pay any taxes what good is the tax credit?
Because it was explained to me that the credit comes off the taxes to be paid - is this correct????? Or what?

ET1 SS · #8 07/30/12, 09:10 PM

Quote:

Originally Posted by Micheal

Please explain the tax credit.....
If'n I file but don't pay any taxes what good is the tax credit?
Because it was explained to me that the credit comes off the taxes to be paid - is this correct????? Or what?

A tax credit is like taxes already paid.

TnAndy · #9 07/31/12, 06:07 AM

Quote:

Originally Posted by Micheal

Please explain the tax credit.....
If'n I file but don't pay any taxes what good is the tax credit?
Because it was explained to me that the credit comes off the taxes to be paid - is this correct????? Or what?

By filing, I would assume you had tax withheld from some source.....employment, investment income, etc....( or do you just file for fun ? )....and a credit allows you to recapture some of that.....money you have already paid in to the govt.....EVEN IN PREVIOUS YEARS.

Credits come off your taxes dollar for dollar....in other words, if you have a credit of 1,000 and you owe ( or already had withheld ) 1,000, you would owe nothing ( or get 1,000 back in the case of having it previously withheld)

In the case of solar, it allows you to recover 30% of what you spend on solar, which is your own dadgum money.

A DEDUCTION, on the other hand, comes off your taxable income.....meaning it reduces your total income, and thus, the amount of tax on the deduction ( your tax rate ).....assume you have a deduction of 1,000.....you would take that amount off your gross ( say it's 50,000 ) and pay taxes on the rest ( 49,000 ). What you saved was your tax rate ( say it's 20% ) times 1,000.....or 200 bucks.

Credits are FAR more valuable than deductions.

I'm going to take every credit AND deduction I can.....BECAUSE IT'S MY MONEY.

To pay an additional 30% for your solar ( or any other thing a credit/deduction is available for ) seems rather silly to me......and if you don't take what's available, that's EXACTLY what you're doing.

Good, or bad, our Congresscritters use tax policy to shape things the public does. IF you really want to stand on principle, don't file, and don't pay income taxes AT ALL, since they are clearly unconstitutional.

Micheal · #10 07/31/12, 06:57 AM

Thanks for the explanation.
Why I asked was a couple years back I got a tax credit for putting in new windows and got that amount of money back plus the normal refund (what I would have gotten without the credit). The year after that a past co-worker had new windows put in and his tax credit went by the way-side because he hadn't paid any taxes in nor owed anything......... Both were "credits" but because of a law change mine was real money, but his was just a useless piece of paper........

And Yes I file and not just because I like to. Although because of my income etc I was told that after next year (April's filing) I will no longer have to file because I'll be "old".

tarbe · #11 07/31/12, 06:31 PM

Wow, this news is better than I expected! I half expected to hear the credit would only apply to systems installed by "certified and approved" vendors.

Thanks for all the responses!

Tim

AVanarts · #12 07/31/12, 07:37 PM

Quote:

Originally Posted by tarbe

Wow, this news is better than I expected! I half expected to hear the credit would only apply to systems installed by "certified and approved" vendors.

Thanks for all the responses!

Tim

That's what I expected too. I also expected it to not apply to off-grid homes. Now I need to start digging out those receipts and putting them together in one file.

With my luck it won't exist in a year or two when we finally get the cabin finished.

TnAndy · #13 08/01/12, 06:04 AM

Credit runs thru the end of tax year 2016 as of right now ( subject to the whims of Congress ).....so you have 4 years to place in service.

logbuilder · #14 08/05/12, 01:37 AM

Here is a link to the federal incentives.

DSIRE: Incentives/Policies by State: Federal : Incentives/Policies for Renewables & Efficiency

Also, here is another link to a map of the US. Select your state and you will be able to see if there are any state incentives available.

DSIRE: DSIRE Home Database of Energy Efficiency, Renewable Energy and Solar Incentives, Rebates and Programs and Policy

I live in WA state. We get additional incentives above the 30% fed credit.

Here is an interesting one. It applies to grid tied systems.

Where I live, we pay about 9 cents/kwh. If you use components (panels, chg ctlr, inverter..) that are made in WA state, you can get up to 54 cents for whatever you put back on the grid.

Quite a few other incentives which can really help to shorten your payback time.

My thinking is that these types of incentives are going to scarce as budgets get tighter.

rsbhunter · #15 08/06/12, 09:00 PM

TNAndy, i understand that the solar equiptment must be installed and operating, but if i bought stuff this year, and install the system next year, is the credit still "valid" or does the equipment have to be installed and operating the same tax year as purchased? Thanks, rsbhunter

TnAndy · #16 08/07/12, 02:41 PM

Doesn't matter WHEN you bought it ( can be over several years if you want ).....the requirement is "when placed in service".....then total up what you spent, and that's your amount for figuring the credit.

You can add to that later if you add more to the system. As I said, I've done it 3 times as I've expanded mine since '08.

Alaska · #17 08/07/12, 07:39 PM

And you can roll over unused credit into the following years until you use it all.