Tax Credit on Gross Cost of Net Cost After Utility Rebates?

[PenguinSolar]

I'm in CA and received a number of bids.

On all the bids I've seen they are calculating the 30% solar tax credit rebate on the GROSS cost, this is before any of the CA Solar Initiative rebates.

Is this correct?

I remember reading on the Go Solar that the Tax Credit is on the NET cost, so if the system costs $15500 and the CSI rebate is 500. The Tax Credit is 30% * 15000.

All the bids from my installers show the Tax Credit as 30% * 15500.

Anyone know what's the REAL story?

Thanks!

[Sunking]

It is NET after all other incentive and rebates have been applied. The dealers are telling you what you want to hear to make a sale.

[bonaire]

Talk to a CPA. Use form 5695.

http://www.irs.gov/pub/irs-pdf/f5695.pdf

It should be on the gross cost. You treat rebates as ordinary income and apply that as a 1099 would be. You pay state and federal tax on that income from the rebate.

[PenguinSolar]

Talk to a CPA. Use form 5695.

http://www.irs.gov/pub/irs-pdf/f5695.pdf

It should be on the gross cost. You treat rebates as ordinary income and apply that as a 1099 would be. You pay state and federal tax on that income from the rebate.

Guess it depends also how the installer is doing it. I have one that will give the instant rebate "pass-on the savings" and lower the final cost I'd pay. Later on the installer collects the rebate directly from the utility.

So maybe it depends on the installer and how they handle it?

Seems weird to have a 1099 on a rebate, I don't typically get a 1099 when I fill out a rebate on stuff I usually buy.

Guess if your tax tier is less than 30%, then you come out ahead if you do gross with the 1099 added back into your income.

[Sunking]

It revolves around who gets the 1099.

[bonaire]

Not all states offer rebates. The federal govt has to take a passive stance. If your state rebates you then expect a 1099. I got one for pa last year for my Chevy volt purchase. This year I expect a 1099 for my solar PV install that I got rebated in 2013 for the 2012 install.

Talk to your CPA. The IRS also has hotlines to take such questions. When in doubt give them a call.