Farm Progress is part of the Informa Markets Division of Informa PLC

This site is operated by a business or businesses owned by Informa PLC and all copyright resides with them. Informa PLC's registered office is 5 Howick Place, London SW1P 1WG. Registered in England and Wales. Number 8860726.

Serving: United States
solar panels Stock trek Images/ThinkstockPhotos

What you should know about solar energy tax credits

Make sure you do your research before you pull the trigger

We’ve had some questions come through our office on solar energy tax credits so I worked up a summary for our clients and wanted to share it with all of you as well.

This is focused on Iowa so please talk to your local CPA or solar energy installation group to get information specific to your area.

Federal

  • Credit available based on installation date
    • January 1, 2019 through December 31, 2019 – 30% of installation cost
    • January 1, 2020 through December 31, 2020 – 26% of installation cost
    • January 1, 2021 through December 31, 2022 – 22% of installation cost
  • Credit reported on
    • Business– Form 3468
      • Line 12b
    • Residential – Form 5695
  • Depreciation
    • Basis decreased by half of the investment tax credit; 85% of installation cost
    • 5-year property
    • Eligible for bonus depreciation
    • Eligible for Section 179
      • No credit available if Section 179 is used
  • Credit carryforward
    • 20 years
      • Based on ITC credit carryover

Iowa

  • Credit available – 50% of federal credit in year of Iowa award;
    • January 1, 2019 through December 31, 2019 –15% of installation cost
    • January 1, 2020 through December 31, 2020 – 13% of installation cost
    • January 1, 2021 through December 31, 2022 – 11% of installation cost
  • Annual statewide award cap - $5 million
    • Awards are on a first-come, first served basis
    • For projects completed/applied for in 2019 but awarded in 2020, the credit amount will be 13% of installation cost
  • Credit limits
    • Business - $20,000
    • Residential - $5,000
  • Credit reported on
    • IA Form 148
    • Tax Credit Code 22
  • Depreciation
    • 5-year property
  • Credit carryforward
    • 10 years

I had a chance to talk with one of our local installation groups about putting solar on my personal residence and the time estimate was three months. She also pointed out that electric companies can account and bank energy out-put of the panels in different ways that will have a major impact on the cost benefit of the project. Make sure you do your research before you pull the trigger.

The opinions of the author are not necessarily those of Farm Futures or Farm Progress. 

TAGS: Commentary
Hide comments

Comments

  • Allowed HTML tags: <em> <strong> <blockquote> <br> <p>

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.
Publish