Has anyone filed a smart solar program 1099? I am trying to determine if we can use any deductions to offset the solar incentive programs income

[ReneeM7122]

Use Form 5695 to claim the Residential Energy Credit  for solar panels and other solar incentive programs. 

Access the form from the Credits and Deductions section in Turbo Tax.  Type Form 5695 in the search box, and then click Jump to Form 5695.

Here is a TurboTax article about energy credits.

[themahers2015]

But we were issued a 1099-misc from the smart program. I know we can still claim our solar credits but this is income related not credit related. 

[ReneeM7122]

If you received a 1099-MISC from the smart solar program then you just need to enter it as a 1099.  There aren't any deductions to offset the income, but keep in mind it is not income for services rendered.  Therefore, on the next screen, you should be able to select that this was a manufacturer's incentive payment

[isokolov2009]

It might be some misunderstanding here. It is not a manufacturer's incentive payment, which would be just essentially the discount for the purchase price. It is the payment for electricity sold back to the grid. So it would be natural to expect to offset this income by the cost of the installed equipment that is a must to generate this electricity (the equipment is the solar panels and/or batteries).
I'm participating in the same program and still waiting for my 1099. So I would greatly appreciate your clarification on this matter. Thanks in advance.

[DaveF1006]

Yes, to offset the income you receive from selling electricity back to the grid, you would file a Form 3468 to claim this investment tax credit according to IRS guidelines.  

1. To claim, go to the search icon at the top of the screen and type "Form 3468"
2. Then select the link that says "jump to 3468".
3. Then there is a screen that will appear saying Investment Credits  say yes
4. hen follow the rest of the prompts to claim the credit. The IRS is very specific in the information they ask so answer the questions carefully.

@isokolov2009

[Bob Reardon]

I think Form 3468 is intended for commercial installations. Also, I would imagine that if you already filed Form 5695, you couldn't claim the same expenses a second time. This does, however, raise the question of how you report 1099-MISC from SMART - as a business or a hobby?

[DaveF1006]

You would report it as neither. It would be reported as other income.  When you report the 1099 MISC, there are two questions in working in the section that will disqualify this from being business income and reported as other income.

• That you don't have an intent to earn money
• This is not a business or side job

@Bob Reardon 

[David2112]

I am still confused about this item; issue came up last year also (and will for the next 5 years). So I have this 1099-MISC from eversource representing payments I receive for solar energy generation credits (on top of the net metering impact). It's not a business, it is the SmartSolar program in Massachusetts where they pay an extra incentive on your solar generation.

It asks to describe the reason and I type in "Massachusetts SmartSolar rebate program"

none of the uncommon situations appear to apply

Did [reason] involve work that's like my main job? No.

How often did I get income...? Every year checked and next year.

"Guess what, you can deduct expenses..."

Let's confirm the reason. OK,  checked the radio button and continue.

Did I get another 1099-MISC for [reason]? No.

Did I get cash or other income from [reason]? leaving it blank and clicking continue.

Did one of you get a 1099-MISC for a different reason? What? No.

OK, done.

Now it says good news, I may qualify for addiontal deductions.

Then back to income summary.

Now the amount shows up as "Sole Proprietor Business" on my income summary.

[David2112]

I found the problem. When it asks whether the income was present in previous years or next year, you must not check those off. If you check off the future year, it bypasses the question about intent to earn money.