This operating investment credit deduction article thread applies to what we have. Purchased Solar equip in 2023, Taking the MACRS depreciation tax incentive (4562) (5695) over 5 years. In our second year, no expenses such as interest or maintenance or related costs. Utility uses net-metering as credits against future usage. Compensation received from kWh distributed back into the grid as net kWh at .07 per kWh. I see the Form 4562 and 5695 and worksheets in 2024 TurboTax so that is being applied for 2024 tax year.
What we understand is there is no monetary compensation received for the annual production back into the grid. Is this a discount and not reportable income or expense? No SRECs. My understanding is this compensation is the main qualification for taking the MACRs depreciation deduction. If you are reporting the depreciation, you must report the associated income. This boils down to where do we report the kWh compensation for solar energy credits and deductions. Or is there nothing to do for years 2 through 5.
When we purchased the solar equipment we were provided the 5695 and 4562 tax computation forms as part of the product package for the 2023 install and tax year at our primary residence and business/hobby location. This was applied to 2023 tax year. There is no carry over on 5695.
Summing it up, where do we report kWh compensation received or do we do nothing since it is net-metering.
