LEAF tax credit and solar tax credit question

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keydiver

keydiver

Well-known member
Joined
Sep 5, 2011
Messages
1,080
Location
Hobe Sound, Florida
I just put down my $99 deposit, and also just completed a 7.5kw solar PV system on my garage roof. IF I am able to get delivery of my Leaf yet this year, it would mean that I will be filing for both a 30% solar tax credit and the $7500 EV tax credit in the same year. I asked my accountant today if he thought that may be a problem, and he didn't see any. I got the impression from a post somewhere on this forum that you couldn't file for both, which is why I ask. Assuming that I have ample tax burden to offset both tax credits, should I be able to file for both? I know this isn't a tax forum, and most of you aren't any more informed than I am, but if anyone has any prior experience with this situation please speak up.
Of course, the other thing that we discussed was that there is also always the possibility that some of these tax credits could go away without warning, due to the financial crisis of the US government. :?
 
keydiver said:
I just put down my $99 deposit, and also just completed a 7.5kw solar PV system on my garage roof. IF I am able to get delivery of my Leaf yet this year, it would mean that I will be filing for both a 30% solar tax credit and the $7500 EV tax credit in the same year. I asked my accountant today if he thought that may be a problem, and he didn't see any. I got the impression from a post somewhere on this forum that you couldn't file for both, which is why I ask. Assuming that I have ample tax burden to offset both tax credits, should I be able to file for both? I know this isn't a tax forum, and most of you aren't any more informed than I am, but if anyone has any prior experience with this situation please speak up.
Of course, the other thing that we discussed was that there is also always the possibility that some of these tax credits could go away without warning, due to the financial crisis of the US government. :?
Click to expand...
I looked into this recently and, as far as I can tell, there is no issue.

The solar system credit is claimed on IRS form 5695 (http://www.irs.gov/pub/irs-pdf/f5695.pdf" onclick="window.open(this.href);return false;). Line 25 subtracts off the credit from form 8910 (http://www.irs.gov/pub/irs-pdf/f8910.pdf" onclick="window.open(this.href);return false;) for the Leaf from your total tax before figuring out the credit allowed this year for the solar. Thus, the car credit is higher priority than the solar credit and you will get the car credit (which is capped at your total tax) before the solar credit (which can be carried over).

You still need to make sure you have enough federal tax liability to cover the $7500 for the car.
 
you can move money from an IRA to a Roth to increase your tax liability, if you are in danger of not getting the full $7500 EV credit.
 
The problems lies in how much tax liability you have. While the solar PV credit can be used from one year to the next, the Car tax credit cannot. You need to tax the Car credit on your tax form first, then what tax liability you have left over, use ESPV (sp) charger credit next, then last if there is any taxes still owed, apply your solar credit.
 
Thank you everyone for your your input. As I said, I have the tax liability, but I was just concerned there might be some type of conflict or a cap that would limit me.
I have been into solar for quite a while, and recently took advantage of a nice $2 per watt rebate that my local utility was running. I did the system myself, so along with the 30% Federal tax credit it is a wash, totally free! I will have a total of about 10kw when completed, giving me a nice reserve for charging the Leaf. Its a tough decision between a Leaf or the new Tesla S, but that's a bit more than I feel comfortable spending right now.
My other car is a 2006 Prius with a Hymotion 5kw/hr upgrade, so I'm anxious to see how my hypermiling practice pays off! :D
 
That sounds great, keydiver, but I don't understand how your solar could be completely free. The fed. tax credit would be 30% off what you actually paid - after utility rebates - I would think. If you installed it yourself and the $2 per watt covers the cost of materials, then I understand that, but then you would not use the 30% fed. tax credit.
 
You could also choose to lease the LEAF, then buy out the lease after a few months. Some on the forum have done that, or planned to, I'm not completely clear on that. Not sure if your dealer gets a say in whether you can buy it out, and not sure if state laws vary. Basically, Nissan gets the $7500 federal credit and buys down the lease with that amount. Then your buyout of the lease is that much less.
 
ecoobsessive said:
That sounds great, keydiver, but I don't understand how your solar could be completely free.
Click to expand...
You're right, there was a little bit left out of pocket, now that I think about it, but my system will make more than that by April 15, maybe even Dec 31, so my brain was thinking of it as a wash. :oops:
 
ecoobsessive said:
That sounds great, keydiver, but I don't understand how your solar could be completely free. The fed. tax credit would be 30% off what you actually paid - after utility rebates - I would think.
Click to expand...

You have the choice of taking the 30% off the top and then paying taxes on the utility rebate next tax year OR pay no taxes on the rebate, and take the 30% off after the rebate. In most cases (including mine), it's a better deal to take it off the top.
 
Interesting, do you have any links/further info on that? When you say "the next tax year", are you referring to April 15,2012 when I do my 2011 taxes? Just so I understand, if my tax rate is <30% it would work out cheaper to pay income tax on the rebate, is that what you are saying?
 
You might be able to arrange it so that the system goes into service before the end of this year, but you don't get the rebates until next year. I thought that was what LEAFfan was suggesting. Then you would take the tax credit on the full price in your 2011 return. I don't know whether that would be strictly legal, though. I suspect the state/local agencies would have to report the rebates as income to you, and that might trigger an IRS computer cross-match leading to an auditor reducing the tax credit.

Ray
 

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