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Green Team
CPAs
Helping Green Companies BuildGreen Team
CPAs
Helping Green Companies Build
a Sustainable Bottom Line
GREEN ENERGY TAX SERVICES
Federal Incentives & Tax Implications
Presented by
Kathy Parker, CPA, MST
Green Team
CPAs
Helping Green Companies Build
Green Team
CPAs
Helping Green Companies Build
Green Incentives and Credits for Businesses
FEDERAL INCENTIVES
Copyright Rodman & Rodman, P.C. All Rights Reserved. 54
Green Team
CPAs
Helping Green Companies Build
Investment Tax Credit Issues Summary
► Solar, Landfill Gas, Wind, Biomass, Hydroelectric,
Geothermal Electric, Fuel Cells, Geothermal Heat
Pumps, Municipal Solid Waste, CHP/Cogeneration,
Hydrokinetic Power (i.e., Flowing Water), Anaerobic
Digestion, Small Hydroelectric, Tidal Energy, Wave
Energy, Ocean Thermal, Fuel Cells using Renewable
Fuels, Microturbines,
► 30% tax credit on qualified basis
► 50% basis reduction in the property
► Accelerated five-year life
► Credit is 100% offset to AMT
Green Team
CPAs
Helping Green Companies Build
Business Energy Investment Tax Credit –
Section 48
Is the property:
1. Qualified biomass? 2. Qualified small wind turbines?
3. Solar used to generate electricity for heating or cooling or to provide solar process heat?
Did the taxpayer invest in
alternative energy property to generate power
for its own use?
Was the property placed in service
on or before December 31, 2016?
30% credit (10% for solar after 2016)
10% credit
Is the property:
1. Equipment for producing or distributing geothermal energy?
2. Equipment that uses the ground or ground water to heat or cool a structure?
3. Qualified micro-turbines (small combustion)?
4. Combined heat and power systems?
NO
Y
E
S
No additional benefit
available
N
O
NO
Note that the credit for geothermal property,
with the exception of geothermal heat
pumps, has no stated expiration date.
Y
E
S
Y
E
S
Y
E
S
Y
E
S
NO
Y
E
S
Green Team
CPAs
Helping Green Companies Build
Passive vs. Active
• Passive issues (Unless have Passive Income)
• Must materially participate to be active (for individuals)
• Treasury has rules/test
• 500 hours per year of day to day management
• C Corps does not apply
• Limits losses and credits through Passive Activity Loss
(PAL)
• PAL can be offset against other Passive Income
• Losses can be carried forward
• Credits can be carried forward (carried back 1 year,
carried forward 20 years) – Must carryback.
Green Team
CPAs
Helping Green Companies Build
Depreciation
• Bonus Depreciation expired end of 2013
• Solar depreciated over 5 year life under accelerated
depreciation
• Accelerated Depreciation
Green Team
CPAs
Helping Green Companies Build
State Tax Incentives
• http://www.dsireusa.org/
(Database of State
Incentives for Renewable
Energy)
Green Team
CPAs
Helping Green Companies BuildTHANK YOU
Kathy Parker, CPA, MST
Rodman & Rodman, PC
3 Newton Executive Park
Newton, MA 02462
617-965-5959
