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Solar Energy System Tax Credit

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To request a Solar Energy System Tax Credit, you are required to complete an application. The application requesting an award for installations on or after January 1, 2016 must be received by May 1 following the year of the installation of the solar energy system or the award request will be denied.

If you installed a system during 2014 and did not submit an application by May 1, 2015, you can still submit that application today. If the application is complete, you can receive an award to claim on your 2016 tax return or from the current available award cap year, whichever is later.

If you installed a system during 2015 and did not submit an application by May 1, 2016, you can still submit that application today. If the application is complete, you can receive an award to claim on your 2017 tax return or from the current available award cap year, whichever is later.

Residential Installations

The application for the Iowa credit cannot be made for individuals until the installation of the solar energy system is complete.

Qualifying installations must meet the federal residential energy efficient property credit related to solar energy provided in sections 25D(a)(1) and 25D(a)(2) of the Internal Revenue Code. Installations that occur in your tax year that begins on or after January 1, 2014 but before December 31, 2015, the award is equal to 60% of the federal credit, not to exceed $5,000. Installations that occur after January 1, 2016 are equal to 50% of the federal credit up to $5,000.

Business Installations

An application for the Iowa credit for businesses cannot be made until the installation of the solar system is complete and the system is placed in service. Qualifying installations must meet the federal energy efficient property credit related to solar energy provided in sections 48(a)(3)(A)(i) and 48(a)(3)(A)(ii) of the Internal Revenue Code. Installations that occur in your tax year that begins on or after January 1, 2014 but before December 31, 2015, the award is equal to 60% of the federal credit, not to exceed $20,000. Installations that occur after January 1, 2016 are equal to 50% of the federal credit up to $20,000.

Solar Energy System Tax Credit Awarded by Year

2017
$4,963,243*
2016
$4,998,437

*Additional applications may be waiting review. This number does not reflect all applications received because some applications have not been processed yet.

The credits will be issued on a first-come, first-served basis until the $5 million cap is reached each year. If the Department receives applications for tax credit awards in excess of the $5 million available in a year, the applications will be prioritized by the date and time your completed application is successfully submitted. To create a completed application to submit, you must have electronic copies of the following required documents:

  • An invoice or other document showing the cost of the system
  • A copy of the “utility completion sheet” that you obtain from your utility company
  • The Tax Credit Applicant Certification form that you will complete during the application process
If you are applying for the credit for a business installation, documentation to verify the date the system was placed in service is also required. The documentation may include approval of required license or permits, or a letter from the utility company that you are connected to the power grid. Alternatively, if you are unable to obtain a document from the utility company you must also attach a statement that includes the following information:

  • Your name, address, taxpayer identification number, email address, and telephone number
  • The date that the energy property was placed in service
  • A declaration, applicable to the statement and any accompanying documents, signed by you, or signed by a person currently authorized to bind you in such matters, in the following form: “Under penalties of perjury, I declare that I have examined this statement, including accompanying documents, and to the best of my knowledge and belief, the facts presented in support of this statement are true, correct, and complete.”

Although you have the option to save a partially completed application and return to finish it later, a saved application is NOT considered submitted. Failure to submit the application by May 1 following the installation year will result in a denial of the application. However, submission of a completed application at any time before the due date does not guarantee that you will be awarded a Solar Energy System Tax Credit.

Once your application is approved, a tax credit certificate will be mailed to you.