In your prior post you said "Intent or lack thereof has absolutely zero to do with law", so now it goes without saying that intent does matter?
In the case of tax law ignorance is an actual defense.
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Master Thread: Energy products and Tax discussions
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Jeremy3292
Active Member
Part of me thinks you are purposely attempting to misconstrue what I am saying...
As it pertains to the topic of discussion on these last few posts, it has zero to do with it. My comments are solely related to the topic at hand and are not to be used out of context.
Note what I stated right after your quoted words: "If I run over someone with my car "without intent" does that matter? No, it doesn't; I am still liable."
Reading comprehension would tell you that I am not opining on how much liability you would have, I am merely stating you have liability regardless. That was the topic of the conversation.
For criminal tax defense which again, is not the topic at hand. Grid charging doesn't rise to anywhere near that level. We are so far off from the topic at hand now...which was the following in my estimation:
There isn't an IRS ruling or Treasury regulation on grid charging, just a PLR which has no authority outside of the specific taxpayer who requested it for his/her specific case.
There is also no statute that states anything about where the battery power must be derived from in order to claim the tax credit.
My point this entire time is that there is no law/statute/code that says if you grid charge you can't take the full tax credit. Does that mean the IRS can't still come after you? No, it most certainly does not. The gov't generally does whatever they want.
I personally would not be worried, but YMMV. I suggest everyone talk to their own tax advisor and see what risk profile fits his/her own needs.
Cheers
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So after all the back and forth, it's still ambiguous. Assuming one had an old install, does one fall under the rules/guidelines of previous tax policy or the new IRA? I would assume old installs fall under old policy.
These 3 articles state pretty much the same thing and sounds like you need to solar charge 100%. People should do their own research and even though Jeremy3292 isn't worried to grid charge off-peak and export all on-peak, he is doing a post IRA battery install so that might be different from your case.
klavenslawgroup.com
www.utilitydive.com
These 3 articles state pretty much the same thing and sounds like you need to solar charge 100%. People should do their own research and even though Jeremy3292 isn't worried to grid charge off-peak and export all on-peak, he is doing a post IRA battery install so that might be different from your case.
Energy storage retrofit of solar system can qualify for ITC
Energy storage retrofit of an existing residential solar system can qualify for ITC and this is likely the case for commercial solar systems, too.
IRS: Residential storage eligible for ITC when charged by onsite solar
The ruling applies only to an individual storage facility, but shows how the agency may interpret home battery eligibility for the 30% solar investment tax credit.
Jeremy3292
Active Member
Agreed, as we got extremely off track in this thread.So after all the back and forth, it's still ambiguous. Assuming one had an old install, does one fall under the rules/guidelines of previous tax policy or the new IRA? I would assume old installs fall under old policy.
These 3 articles state pretty much the same thing and sounds like you need to solar charge 100%. People should do their own research and even though Jeremy3292 isn't worried to grid charge off-peak and export all on-peak, he is doing a post IRA battery install so that might be different from your case.
Energy storage retrofit of solar system can qualify for ITC
Energy storage retrofit of an existing residential solar system can qualify for ITC and this is likely the case for commercial solar systems, too.
IRS: Residential storage eligible for ITC when charged by onsite solar
The ruling applies only to an individual storage facility, but shows how the agency may interpret home battery eligibility for the 30% solar investment tax credit.
But remember that a PLR has no authority of law, code, or statute and may not be cited as precedent in any case. It ONLY applies to the specific taxpayer that requested it and his/her exact circumstances. It is certainly up to each individual person to weigh his/her own risk profile.
Cheers
I think it may be worth taking a step back.
Prior to the IRA, the statute for the ITC only said renewable energy systems were eligible for the credit. So the question was whether a battery was part of the renewable energy system if it was installed after the solar system. The Private Letter Ruling addressed this and clarified that as long as it was charged 100% from solar (for a residential system), the battery qualified for the credit.
There is a second question on what should happen if the battery programming is changed later so it no longer qualifies. As far as I'm aware, there is no clawback for the residential ITC. If you install a solar system on your house and then sell your house a year later, you don't need to return the tax credit. For commercial systems, you would owe 80% of the ITC back.
The conclusion if you were to extrapolate to the battery is that the battery only needs to be charged 100% from solar when it is first installed. This doesn't seem right, which is why some of us take the view that the 5 year pro-ration is more reasonable. It is worth noting, though, that the statute has nothing to say on this subject. The IRS could interpret the law differently if it comes up in an audit.
Prior to the IRA, the statute for the ITC only said renewable energy systems were eligible for the credit. So the question was whether a battery was part of the renewable energy system if it was installed after the solar system. The Private Letter Ruling addressed this and clarified that as long as it was charged 100% from solar (for a residential system), the battery qualified for the credit.
There is a second question on what should happen if the battery programming is changed later so it no longer qualifies. As far as I'm aware, there is no clawback for the residential ITC. If you install a solar system on your house and then sell your house a year later, you don't need to return the tax credit. For commercial systems, you would owe 80% of the ITC back.
The conclusion if you were to extrapolate to the battery is that the battery only needs to be charged 100% from solar when it is first installed. This doesn't seem right, which is why some of us take the view that the 5 year pro-ration is more reasonable. It is worth noting, though, that the statute has nothing to say on this subject. The IRS could interpret the law differently if it comes up in an audit.
Materiality is a concept or convention within auditing and accounting relating to the importance/significance of an amount, transaction, or discrepancy. - from Wikipedia
In my case, I have a tiny system. As a retiree, my income is so low that it took three years to write off the credit. The IRS would go back only three years to audit my return unless culpable negligence has been evidenced. In my case, it's not worth anyone's time to mess with for a claw back. Just my opinion, but any other poor folks should get some perspective before they fret about all this.
David
In my case, I have a tiny system. As a retiree, my income is so low that it took three years to write off the credit. The IRS would go back only three years to audit my return unless culpable negligence has been evidenced. In my case, it's not worth anyone's time to mess with for a claw back. Just my opinion, but any other poor folks should get some perspective before they fret about all this.
David
I’m not sure how to make this any more clear, but pre-IRA, the ITC made zero mention of energy storage systems. The only reason batteries qualified was because they could be considered a renewable resource because you’re charging them with solar.
That’s the law (or was the law), and it’s pretty cut and dry. Not sure why you’re trying to make it more ambiguous or complicated than it is. Unless your grid was 100% renewable, a grid-charged battery would not apply.
As has been pointed out above though, since there’s no claw-back provision, if the battery is set up to be charged by solar but then is switched to be grid-powered, it appears that there would be no repercussions. But that’s completely different from claiming that the ITC has no requirement for batteries (installed prior to 2023) to be charged by solar.
Jeremy3292
Active Member
Yes, I agree.
Yes, I agree.
I don't believe I ever claimed the "ITC has no requirement for batteries to be charged by solar."
The entire discussion here has been surrounded by the fact that everyone HAS SOLAR already with their batteries and the batteries are charged by solar almost all or most of the time. There has been no discussion around someone just having a random standalone battery without solar and trying to qualify for tax credits under the old ITC.
The paramount question has been "If I grid charge my battery at all, does that void or clawback any portion of the previously claimed ITC tax credit?"
And my response has been the same: There is no law/statute/code that says if you grid charge your battery 0.01% or more it disqualifies you from claiming the tax credit or clawing back the tax credit.
You are of course still free to say "I am uncomfortable" or "my risk profile doesn't align with that." But what you can't say is that there is any provision that states you are disqualified from the tax credit if you solar charge X% and grid charge X% of the time.
Additionally, the statute of limitations for the IRS gives them 3 years from the return due date to audit you (unless you grossly misrepresented your income by 25% or more). I imagine most people on here who claimed that old credit have already passed that window or are close to passing that window now so the point is almost moot.
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Matt-FL
Member
@Notadog, the way I read this, it can be done once. But, it could possibly be construed as 'once' per install. I'm sure someone else will chime in.
www.forbes.com
'It’s essential to note that you can only claim the credit once. '
Solar Tax Credit By State in 2023: A Residential Solar Energy Tax Credit Guide
Get expert advice on improvements to your home, including design tips, how much you'd expect to pay for a pro and what to ask when hiring experts.
www.forbes.com
'It’s essential to note that you can only claim the credit once. '
Watts_Up
Well-Known Member
Matt-FL
Member
For mine, I did. I had several pre-work costs that I incurred - including cameras for the roof (shading planning/monitoring), Emporia energy monitor system, electrical prep work, and a few other items. I added those to the Tesla bill for entering into my tax incentive. I have all the receipts categorized by my accountant, all the IRS requests is a total amount.
I don't think Forbes is a reliable reference for this. On energy.gov (Homeowner’s Guide to the Federal Tax Credit for Solar Photovoltaics) there is this FAQ:
My reading of this is that you get the credit on any project as long as it meets the requirements of the program. Whether a portable solar generator meets those requirements may be more debatable.
I don't believe this is correct (per CPA).
Yes. For example, we had Powerwalls and panels installed by separate vendors and were able to request credit for both (at the time because the PWs were installed with the solar).
RKCRLR
Active Member
I installed solar in 2009 and took the ITC. I installed a more solar in 2019 and took the ITC again. I installed a 3rd Powerwall last year and got the ITC again.
EIon MusI<
Member
How many years can I carry forward the newly "Federal residential solar energy credit" that was passed recently? I understand it's 30% now for 2022-2032, so can you carry it out that far to 2032?
EIon MusI<
Member
Can you keep carrying forward the solar credit balance leftover for each tax year until it zeroes out? The IRS website general faq says you can carry forward any leftover solar credit to the "next" year, but other sites mention you can carry the leftover balance forward for multiple tax years.
Jeremy3292
Active Member
Yes, but not sure mathematically how it is even possible to have that many years of carry forward...
EIon MusI<
Member
Thank you. I'm looking at Tesla solar tiles and I would not be able to use the full 30% tax credit to offset my tax liability for the year, it would at least have to be three years total.
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