NexPower modules? Help in choosing a system

[KRenn]

What does this mean? I'm a novice, can someone tell me where the additional taxes are coming from?....
thanks!

There's strings attached to utility incentives, most utilities will issue a 1099 with any incentive payment on a purchased system, even if the incentive is assigned to the installer. Many solar installers are either ignorant of this or conveniently ignore it when generating their proposals.


Some utility companies are now sending the 1099 early in the process(meaning the incentive will be taxed as regular income) requiring for it to be filled out completely before solar system approval is given, many others are still doing it on the back-end, so your system is installed and then 2-3 months after that you get a letter from the utility, requiring you to fill out the 1099 and only then do you realize that your ROI just got knocked back 2-3 years.

[kimberlymitchell87]

Stay away from thin film, they have no long term data to prove they will last the time they have printed on a piece of paper. Most Thin film company are not doing well financially and I would go as far to say in 5+ years most the current film manufactures will be gone.

What ever you buy, a warranty is only as good as the company behind it ... 25 years? I can count on one hand how many PV company's have been around that long to support the products.

[bpollard]

There's strings attached to utility incentives, most utilities will issue a 1099 with any incentive payment on a purchased system, even if the incentive is assigned to the installer. Many solar installers are either ignorant of this or conveniently ignore it when generating their proposals.


Some utility companies are now sending the 1099 early in the process(meaning the incentive will be taxed as regular income) requiring for it to be filled out completely before solar system approval is given, many others are still doing it on the back-end, so your system is installed and then 2-3 months after that you get a letter from the utility, requiring you to fill out the 1099 and only then do you realize that your ROI just got knocked back 2-3 years.

I called Austin Energy and got two separate answers (both the same answer) that Austin energy does *not* issue 1099 for rebates issued to residential customers...

[bpollard]

Wrong.
As I stated before if the utility or government agency 1099's you you take the 30% on the whole amount.
Only if the rebate is not included in your gross income is the credit reduced by the rebate amount.

From the instructions on the IRS form

If you received a subsidy from a public utility for the
purchase or installation of an energy conservation
product and that subsidy was not included in your
gross income, you must reduce your cost for the
product by the amount of that subsidy before you compute your
credit. This rule also applies if a third party (such as a contractor)
receives the subsidy on your behalf.

I talked to two tax professionals who agreed that the 30% could be taken off the whole amount (gross).

[Naptown]

I talked to two tax professionals who agreed that the 30% could be taken off the whole amount (gross).

Then expect a 1099 from Austin energy.
In reality there is no free lunch. And the IRS will come looking.
Just curious
Did they ask for your social security number on any form?
If you receive the rebate/subsidy then you will need to add this amount to your gross income in order to claim the full 30%.
I quoted directly from the IRS form it does not get any clearer or less confusing.
If Austin Energy is not issuing 1099's then I personally will report them to the IRS. This is a requirement.
I hope your "tax professionals" are willing to represent you in court and pay any penalties and legal fees you WILL incur if audited.

[KRenn]

I talked to two tax professionals who agreed that the 30% could be taken off the whole amount (gross).

Then I should have stressed that you need to find some competent tax professionals. Either you get 1099'ed and pay tax on the rebate, or you have to deduct the rebate amount from the 30% tax credit, there is no gray area on that,there was a few years ago, but the IRS made it very cut and dry, find some tax professionals that are up to date with current regulations.


Trying to claim the entire 30% tax credit while also receiving a full rebate is an awesome way to get audited, it has happened and continues to happen when people seem to think that they're being slick somehow.

http://www.azcentral.com/arizonarepublic/business/articles/2010/07/05/20100705arizona-solar-tax-credit-irs-letter.html