IRS and Tax info

The following are snippets and links to IRS documents and forms.

http://www.irs.gov/irb/2013-47_IRB/ar09.html

Internal Revenue Bulletin:  2013-47
November 18, 2013

Q–25: If a taxpayer installs solar electric property other than directly on the taxpayer’s home, may the taxpayer claim the 30% tax credit?

A–25: Section 25D(d)(2) defines a qualified solar electric property expenditure, in part, as an expenditure for property that uses solar energy to generate electricity for use in a dwelling unit that is used as a residence by the taxpayer. Therefore, if solar panels that are not directly located on the taxpayer’s home use solar energy to generate electricity directly for the taxpayer’s home the taxpayer may claim the 30% credit.

Q–26: A taxpayer purchases solar panels that are placed on an off-site solar array and connected to the local public utility’s electrical grid that supplies electricity to the taxpayer’s residence. The taxpayer enters into a direct contractual arrangement with the local public utility that supplies electricity to the taxpayer’s residence to allow the taxpayer to provide electricity to the grid using a net metering system that measures the amount of electricity produced by the taxpayer’s solar panels and transmitted to the grid and the amount of electricity used by the taxpayer’s residence and drawn from the grid. The contract states that the taxpayer owns the energy transmitted by the solar panels to the utility grid until drawn from the grid at his residence. Absent unusual circumstances, the panels will not generate electricity for a specified period in excess of the amount expected to be consumed at the taxpayer’s residence during that specified period. Can the taxpayer claim the 30% credit?

A–26: Yes. Section 25D(d)(2) defines a qualified solar electric property expenditure, in part, as an expenditure for property that uses solar energy to generate electricity for use in a dwelling unit used as a residence by the taxpayer. The taxpayer’s expenditure for off-site solar panels under this type of contractual arrangement with a local public utility that supplies electricity to the taxpayer’s residence meets the definition of qualified solar electric property expenditure.

Q–27: A taxpayer purchases and installs solar electric property to generate electricity for the taxpayer’s own home and to allow the taxpayer to sell excess electricity to a utility. Unlike the taxpayer in Q–26, this taxpayer generates more than a minimal amount of excess electricity. Does this taxpayer qualify for the 30% credit on the full amount of the solar electric property?

A–27: No. Under these facts, the taxpayer may not claim the credit for the full amount of the solar electric property expenditure because the property not only generates electricity for use in the taxpayer’s home, but it also generates electricity for sale by the taxpayer. The taxpayer may only claim the credit for the portion of the solar electric property expenditure that relates to the electricity generated for use in the taxpayer’s home. In addition, the taxpayer may be able to claim the § 48 credit for a portion of the solar electric property expenditure if the requirements of § 48 are satisfied.

http://www.novoco.com/energy/resource_files/irs_guidance/irc/section48_030113.pdf

Q. How do tax credits get documented?
A: There is a form you fill out when you file your taxes next year to claim the tax credit. It is specifically to claim renewable energy tax credits but there are different forms for personal and business use. Any accountant will be able to help.
Here are some links:

Form 3468 Investment Credit for businesses Instructions
Form 3468 PDF Investment Credit for businesses
Form 5695 Residential Energy Efficient Property Credit Instructions
Form 5695 PDF Residential Energy Efficient Property Credit

Q. Can renters qualify for the 30% federal tax incentive?
A. Yes.

Q. Is the Vermont Energy Investment tax something I can use?

A. Only businesses in Vermont would be eligible for this credit and if a residence is used then only the portion of the residence that is actually used by the business is applicable.
Vermont offers an investment tax credit for installations of renewable energy equipment on business properties. The credit is equal to 24% of the “Vermont-property portion” of the federal business energy tax credit. For solar, small wind, and fuel cells this constitutes a 7.2% state-level credit for systems placed in service on or before 12/31/2016. After this date, solar (except hybrid solar lighting) technologies are eligible for a 2.4% credit.  For microturbines, and combined heat and power systems, the credit is a 2.4% state-level tax credit for systems place in service on or before 12/31/2016. The geothermal tax credit is 2.4% indefinitely.*
Any unused tax credit may be carried forward for 5 years.