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Make sure you do your research before you pull the trigger
2 Min Read
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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.
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