No, this is not considered taxable income as it would be considered a rebate. However, since they did issue you a 1099-Misc, the IRS will be looking for it, so you will need to enter the income from the form and then back the income out.
To enter the 1099 Misc as a rebate take the following steps:
- Income
- 1099-MIsc under Other Common Income
- Enter the information from the 1099-MIsc
- Continue through and say the work does NOT involve work that is like your main job
- Select the years you received it
- Say no, to did this involve an intent to earn money
Then you will take the following steps to remove the income:
- Income
- Less Common Income
- Miscellaneous Income
- Other Reportable Income
- Answer Yes to Any Other Taxable Income
- Enter the description such as 1099-Misc received for rebate for solar panels
- Enter the amount on the 1099-Misc as a negative number.
If your contract is for a lease, then they are correct, you cannot claim the energy credit, they do. In order to claim the credit, you would have had to purchase the solar panels.
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