Personal Tax Credits and Deductions

Idaho

Solar, Wind, and Geothermal Deduction

This statute allows taxpayers an income tax deduction of 40% of the cost of a solar, wind, or geothermal device used for heating or electricity generation. Taxpayers can apply this 40% deduction in the year in which the system is installed and also can deduct 20% of the cost for three years thereafter. The maximum deduction in any one year is $5,000.

See Idaho Statutes 63-3022C.

Maryland

The Maryland Clean Energy Incentive Act

Effective July 1, 2000, and enacted by 2000 HB 20, Maryland offers sales tax exemptions or income tax credits when purchasing certain qualifying high-efficiency Energy Star® appliances, electric and hybrid-electric vehicles, and certain renewable resource energy systems. The act allows individuals or corporations to claim a state income tax credit of 15% of the total installed cost of a solar water heating (maximum credit $1,000) or photovoltaic system (maximum credit $2,000). The unused amount of the credit for any taxable year may not be carried over to any other taxable year. Eligible systems must meet performance, quality standards, and certification requirements specified by the Maryland Energy Administration. The act also provides for a personal or corporate income tax credit for the production of electricity from commercial and industrial waste, forestry (excluding old-growth residue) and agricultural by-products, and landfill and anaerobic digestion biogas.

See Maryland Code § 2-1302.1 and ACM § 11-226.

North Carolina

Renewable Energy Tax Credit - Personal

North Carolina offers an expanded tax credit of 35% of the cost of renewable energy property constructed, purchased, or leased by a taxpayer and placed into service in the state during the taxable year. The credit is subject to various ceilings depending on whether the renewable energy equipment serves nonresidential or residential property; and, for residential property, the kind of renewable energy technology used. If the property serves a single-family dwelling, the credit is taken for the taxable year in which the property is placed in service. For all other property, the credit is taken in five equal installments beginning with the year the property is placed in service.

The credit can be taken against franchise tax, income tax or, if the taxpayer is an insurance company, against the gross premiums tax. The allowable credit cannot exceed 50% of the taxpayer’s tax liability for the year reduced by the sum of all other credits. The unused portion of the credit may be carried over for the next five succeeding years.

See NCGS § 105-129.16A.

Oregon

Residential Energy Tax Credit

The Residential Energy Tax Credit is for premium-efficiency appliance and duct systems, closed-loop geothermal space or water heating systems, solar water and space heating systems, photovoltaics, wind, fuel cells, and alternative fuel vehicles and charging or fueling systems. The tax credit is the lesser of:

(1) The first year energy yield in kilowatts per hour (kWh) multiplied by 40 cents; or

(2) Twenty-five percent of the net cost of the appliance, not to exceed $1,000.

Performance-tested duct systems qualify for a tax credit of 25% of the cost of the work, not to exceed $250. The tax credit for photovoltaic systems and solar or geothermal domestic water heating and space heating systems is the first-year energy yield of the device in kWh multiplied by 60 cents, up to $1,500.

The tax credit for solar pool or spa heating systems is the lessor of:

(1) Fifty percent of the cost of the device; or

(2) The first-year energy yield multiplied by 15 cents, not to exceed $1,500.

See ORS § 316.116.

Vermont

Solar and Small Wind Incentive Program

Vermont’s program authorizes the use of a portion of the state’s petroleum violation escrow fund to provide incentives for qualifying solar electric, solar hot water, and small wind systems. A total of $522,900 is available for incentives. The program, launched on October 24, 2003, is expected to support the installation of approximately 120 to 150 new renewable energy systems in the state within a 12- to 24-month period. Residents, businesses, and municipalities are eligible to apply for the incentives. The project is administered by the Renewable Energy Resource Center (RERC), a project of the Vermont Energy Investment Corporation.

See 2003 S 57.

Other Personal Tax Credit Examples

Arizona - Solar and Wind Energy Systems Credit

See ARS 43-1083.

California - Solar or Wind Energy System Credit - Personal

See California Revenue and Taxation Code Section 17053.84; 2001 SB 17.

Hawaii – Residential Solar and Wind Energy Credit

See HRS § 235-12.5.

Massachusetts - Renewable Energy State Income Tax Credit

See General Laws of Massachusetts Chapter 62 Section 6(d).

• Residential Alternative Energy System Tax Credit

See MCA § 15-32-201 through § 15-32-203.

• Residential Geothermal Systems Credit

See MCA § 15-32-115.

• Net Metering System Credit

See MCA § 15-32-401 through § 15-32-407.

New Jersey - Electric Discount and Energy Competition Act

See New Jersey Permanent Statutes 48:3-49.

New York – Solar and Fuel Cell Electric Generating Equipment Tax Credit

See NY Tax Law, Article 22, sec. 606 (g-1) and 606 (g-2).

North Dakota - Geothermal, Solar, and Wind Personal Credit

See ND Century Code 57-38-01.8.

Rhode Island – Renewable Energy Personal Tax Credit

See RI General Laws § 44-57.

Utah - Renewable Energy Systems Tax Credit - Personal

See Utah Code Revenue and Taxation 59-10-134.

California’s Tax Deduction for Interest on Loans for Energy Efficiency

This personal tax deduction allows taxpayers to deduct the interest paid on loans used to purchase energy-efficient products or equipment for a residence in California. The deduction is for the purchase of energy-efficient heating, ventilation, air-conditioning, lighting, solar, advanced metering of energy usage, windows, insulation, zone heating products, and weatherization systems.

See California Revenue and Taxation Code 17208.1; 2001 SBX2 75.