Is pge Equity Resiliency program taxable?

[h2ofun]

For folks who have got batteries under the PGE Equity Resiliency program, is the money gotten to pay for these taxable?

 

[CrazyRabbit]

you know the answer!!! lol

 

[h2ofun]

you know the answer!!! lol

No, I do not know that answer, which is why I am asking. I can find nothing on google about the question

 

[RKCRLR]

My understanding is energy incentives are not considered taxable by the IRS.

 

[wjgjr]

My understanding is energy incentives are not considered taxable by the IRS.

I do not think this is correct, as a blanket statement. There are potentially different rules depending on the source (such as state vs. utility vs. private) and the type of incentive. For example, in MD, I received two incentives from the state, one for solar, and one for PWs. The solar incentive is setup as a grant (and I received a check from the state.) That is considered taxable income, and MD indicates it will issue a 1099 for that (there are some reports others did not actually receive a 1099 last year despite the state's official statement.) On the other hand, the battery incentive is setup as a tax credit, and I can use it to reduce my tax liability to the state when I file my 2020 taxes. So long as my taxes exceed the credit amount, that is not treated as taxable income. However, it reduces the amount of state taxes I could claim on any federal filing. (This would probably have been a bigger deal to more taxpayers before the changes that dramatically reduced the number of taxpayers itemizing deductions.) And this also interacts with the ITC since, for example, though I pay income tax on the state grant, I do not need to reduce the ITC basis for the grant, so I still get that incentive.

I really do not know about these incentives in CA, but it is definitely not always handled the same way.

 

[CrazyRabbit]

Your federal and state purchase/installation tax credit isn’t taxable. Paid for production is, it is income.

 

[h2ofun]

I do not think this is correct, as a blanket statement. There are potentially different rules depending on the source (such as state vs. utility vs. private) and the type of incentive. For example, in MD, I received two incentives from the state, one for solar, and one for PWs. The solar incentive is setup as a grant (and I received a check from the state.) That is considered taxable income, and MD indicates it will issue a 1099 for that (there are some reports others did not actually receive a 1099 last year despite the state's official statement.) On the other hand, the battery incentive is setup as a tax credit, and I can use it to reduce my tax liability to the state when I file my 2020 taxes. So long as my taxes exceed the credit amount, that is not treated as taxable income. However, it reduces the amount of state taxes I could claim on any federal filing. (This would probably have been a bigger deal to more taxpayers before the changes that dramatically reduced the number of taxpayers itemizing deductions.) And this also interacts with the ITC since, for example, though I pay income tax on the state grant, I do not need to reduce the ITC basis for the grant, so I still get that incentive.

I really do not know about these incentives in CA, but it is definitely not always handled the same way.

My first concern is federal taxes.

I asked specifically about the Equity Resiliency program, since the equity program is simple. You pay up front, and assuming you have a tax liability, you write that off as a write off at x%

But on the Equity resiliency program I write a check to the installers, then maybe 6 to 9 months later, I get a check for that amount from PGE. I end up net zero, meaning, I have no extra money, I just have the batteries. Weird I can find nothing on the PGE website about taxes, or on google. Not sure if this program was around last year, which is why I am asking what others in this programs experience is.

 

[h2ofun]

Your federal and state purchase/installation tax credit isn’t taxable. Paid for production is, it is income.

what does paid for production mean?

 

[holeydonut]

what does paid for production mean?

If you actually produce excess energy with your panels and show a net gain on your net metering, that "income" is taxable.

 

[h2ofun]

If you actually produce excess energy with your panels and show a net gain on your net metering, that "income" is taxable.

Are you telling me that if I product extra at my true up, even though they pay basically nothing, PGE will send me a 1099 form to pay taxes on this tiny amount? Have others gotten 1099 taxable income folks they have to use when filing taxes?

That is interesting, even though not the question I am trying to get an answer to, but very interesting. Have you gotten a 1099 form?

 

[holeydonut]

Are you telling me that if I product extra at my true up, even though they pay basically nothing, PGE will send me a 1099 form to pay taxes on this tiny amount? Have others gotten 1099 taxable income folks they have to use when filing taxes?

That is interesting, even though not the question I am trying to get an answer to, but very interesting. Have you gotten a 1099 form?

You're right; the utilities usually offer statement credit instead of paying the cash for the income. So a homeowner who just never asks for the cash check to be sent wouldn't pay taxes. And to your point the excess probably won't be enough money to be worth your while to pursue the paper check.

But yes, if a large-enough paper check is issued, there would be a 1099 sent to the IRS.

BTW, the SGIP and Federal Tax Credit incentives should not be taxable. They are not considered "income" because the money is not derived from any type of income-earning activity. They are purely rebates for purchases. Just like the $2,000 factory to customer incentive you might get when you buy a car or the coupon you clip on a pack of Oreos.

This is in contrast to some programs like those "sign up for a new checking account and get $500" type of things. Since the $500 in this case is an incentive to perform some activity, it is considered income.

But as with all things on the internet, IANAL and IANAA.

 

[h2ofun]

You're right; the utilities usually offer statement credit instead of paying the cash for the income. So a homeowner who just never asks for the cash check to be sent wouldn't pay taxes. And to your point the excess probably won't be enough money to be worth your while to pursue the paper check.

But yes, if a large-enough paper check is issued, there would be a 1099 sent to the IRS.

View attachment 616691


BTW, the SGIP and Federal Tax Credit incentives should not be taxable. They are not considered "income" because the money is not derived from any type of income-earning activity. They are purely rebates for purchases. Just like the $2,000 factory to customer incentive you might get when you buy a car or the coupon you clip on a pack of Oreos.

This is in contrast to some programs like those "sign up for a new checking account and get $500" type of things. Since the $500 in this case is an incentive to perform some activity, it is considered income.

But as with all things on the internet, IANAL and IANAA.

Thanks

I will just assume your opinion is correct

Since I have no idea if I get the batteries, when installed, and rebate from PGE, if all went well, could easily by 2022.

 

[wjgjr]

BTW, the SGIP and Federal Tax Credit incentives should not be taxable. They are not considered "income" because the money is not derived from any type of income-earning activity. They are purely rebates for purchases. Just like the $2,000 factory to customer incentive you might get when you buy a car or the coupon you clip on a pack of Oreos.

This is in contrast to some programs like those "sign up for a new checking account and get $500" type of things. Since the $500 in this case is an incentive to perform some activity, it is considered income.

But as with all things on the internet, IANAL and IANAA.

Two items of note - first is that (as I mentioned above) some state grants are taxable, because of how the programs are set up - even though it seems like a rebate, it is not treated that way. (Not disagreeing with what you say about SGIP, just that it may not apply to all programs in all states.) However, some incentives (like your example, or a bundling discount from Tesla,) while not taxable, do need to be deducted from the amount you claim for ITC purposes - if tesla gives you $1,000 back for bundling powerwalls, you can't get the 26% of that $1,000 back from the government as well.

 

[h2ofun]

Two items of note - first is that (as I mentioned above) some state grants are taxable, because of how the programs are set up - even though it seems like a rebate, it is not treated that way. (Not disagreeing with what you say about SGIP, just that it may not apply to all programs in all states.) However, some incentives (like your example, or a bundling discount from Tesla,) while not taxable, do need to be deducted from the amount you claim for ITC purposes - if tesla gives you $1,000 back for bundling powerwalls, you can't get the 26% of that $1,000 back from the government as well.

I have now looked for a new days, and can find nothing on google that has any comment about taxes period. First time I can think of that nothing comes back from a google search with nothing. End of the day, no 1099, nothing to worry about. It seems this program just started this year, so for the few who have been installed, I wonder if they have even gotten their money back yet. If not, is a non issue for this years taxes.

 

[holeydonut]

Two items of note - first is that (as I mentioned above) some state grants are taxable, because of how the programs are set up - even though it seems like a rebate, it is not treated that way. (Not disagreeing with what you say about SGIP, just that it may not apply to all programs in all states.) However, some incentives (like your example, or a bundling discount from Tesla,) while not taxable, do need to be deducted from the amount you claim for ITC purposes - if tesla gives you $1,000 back for bundling powerwalls, you can't get the 26% of that $1,000 back from the government as well.

I don’t think you need to reduce your purchase price by the sgip before calculating the itc amount. The sgip incentive calculation takes into account the itc. Otherwise it’d be a endless loop of incentives impacting one another.

 

[h2ofun]

For folks who have got batteries under the PGE Equity Resiliency program, is the money gotten to pay for these taxable?

Well, looks like I finally found the answer. This incentive claim form has to be filled out.

The tax liability part towards bottom is pretty clear.

Tax Liability: I understand that the incentives may be taxable and if greater than $600, may be reported to the IRS unless I am exempt from reporting. The Program Administrator may report such rebate payments on IRS Form 1099 unless I have checked corporation or exempt tax status above. You are urged to consult your tax adviser concerning the taxability of rebates. Program Administrator is not responsible for any taxes that may be imposed on you or your business as a result of your receipt of this rebate

 

[charlesj]

Thanks for that $600 minimum for 1099. I am safe.

 

[Ampster]

For folks who have got batteries under the PGE Equity Resiliency program, is the money gotten to pay for these taxable?

Most rebates are considered a reduction in the cost. That may affect the amount of tax credit. Interpretations vary, depending on who you ask. One example of a rebate that I never got a 1099 for was the CVRP for the purchase or a lease of an EV. The other one was the one processed through PG&E. I have no experience with the Equity resiliency program but if they do ask you for your social security number it is likely you will get a 1099.

 

[h2ofun]

Most rebates are considered a reduction in the cost. That may affect the amount of tax credit. Interpretations vary, depending on who you ask. One example of a rebate that I never got a 1099 for was the CVRP for the purchase or a lease of an EV. The other one was the one processed through PG&E. I have no experience with the Equity resiliency program but if they do ask you for your social security number it is likely you will get a 1099.

I guess it will depend on whether folks get a 1099. I just think this program saying they are giving 100% free batteries to low income on every article I have read is a total snake oil sale. Where would these low income folks get the money to pay the taxes?

 

[h2ofun]

This is an interesting link for the question. Shall be interesting what my tax guys opinion is.

26 U.S. Code § 136 - Energy conservation subsidies provided by public utilities