Solar Energy System Tax Credits

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2012 Solar Energy System Tax Credits Awarded to Date (updated 06/13/14):

$ 650,914

2013 Solar Energy System Tax Credits Awarded to Date (updated 04/15/14):

The cap has been met.

2014 Solar Energy System Tax Credits Awarded to Date (updated 06/13/14):

$ 1,280,243

NOTE RECENT CHANGES HAVE BEEN MADE TO SOLAR ENERGY SYSTEM TAX CREDIT APPLICATIONS

The following informs taxpayers about the proper procedures to request an Iowa Solar Energy System Tax Credit and recent changes made to the credit during the 2014 Legislative session.

Between January 1, 2012 and December 31, 2013,an Iowa Solar Energy System Tax Credit was available for individuals equal to 50% of the federal residential energy credit provided in section 25D of the Internal Revenue Code. An Iowa Solar Energy Systems Tax Credit was also available for businesses equal to 50% of the federal energy credit provided in Section 48 of the Internal Revenue Code. New installations that occur on or after January 1, 2014 are eligible for an Iowa Solar Energy System Tax Credit award equal to 60% of the federal residential energy credit provided in section 25D of the Internal Revenue Code for individual taxpayers and 60% of the federal energy credit provided in Section 48 of the Internal Revenue Code for businesses, including banks.

The aggregate amount of credits awarded per calendar year, beginning January 1, 2012 and ending December 31, 2013, was capped at $1.5 million. Beginning January 1, 2014, the aggregate amount of credits awarded per calendar year is capped at $4.5 million.  The credits will be issued on a first-come, first-served basis until the $4.5 million cap is reached each year. If the Department receives applications for tax credit awards in excess of the $4.5 million available in a year, the applications will be prioritized by the date received.

The application or amended application requesting an award must be received by May 1 following the year of the installation of the solar energy system or the award request will be denied.

The application for the Iowa credit cannot be made for individuals until the installation of the solar energy system is complete.  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.  This is consistent with the determination of the year in which the federal solar energy credits can be claimed.   Business applications will be required to submit a completion sheet from the local utility company that verifies that the system has been placed in service.

The Department has developed separate applications for individuals and business organizations for the Iowa Solar Energy System Tax Credits. 

The Department awards the tax credit once the following information is provided:

  • The completed application

  • A copy of the invoice or other documentation showing the cost of the installed system

  • The date the installation was completed

  • If you are a business applicant, the date the system was placed in service

  • The utility completion sheet from your utility company

  • A document verifying that the system qualifies for the federal tax credit

  • The amount of the Iowa tax credit to be reserved

Please complete an application for the year the installation was completed.

2013 Solar Energy System Tax Credit Application for an Individual

2013 Solar Energy System Tax Credit Application for a Business

2014 Solar Energy System Tax Credit Application for an Individual

2014 Solar Energy System Tax Credit Application for a Business Organization

Use the form below to amend a previous application.

Amended Solar Energy System Tax Credit Application

Taxpayers should send the information to the Department at this address:

Iowa Department of Revenue
Tax Research and Program Analysis Section
P.O. Box 14461
Des Moines, IA 50306-3461

Once the amount of the tax credit is verified, the Department will send a letter to the taxpayer verifying the amount of the tax credit and providing a tax credit certificate number. Taxpayers can then claim the credit on their Iowa tax return completing the form IA 148 Tax Credits Schedule.