Changes to the Solar Credit for Louisiana Taxpayers

The Regular Legislative Session made several changes to the solar credit as described in Act 131. Act 131 repealed the eligibility of numerous types of systems, including but not limited to solar thermal systems and solar air conditioning systems, and imposed a requirement that the solar energy system be installed on the homeowner’s primary residence.

Act 131 also reduced the eligible base of the credit for both purchased and leased systems. For purchased systems installed on or after July 1, 2015, the credit is now equal to the lesser of:

1.) two dollars multiplied by the total size of the system as measured in DC watts, or;
2.) 50% of the first $20,000 of the cost of purchase and installation.

For leased systems installed on or after January 1, 2014, effective June 19, 2015, the credit is now equal to 38% of the first $20,000.
However, leased systems installed on or after July 1, 2015 remain subject to a restriction that the system cost no more than two dollars per watt and provide for no more than six kilowatts of energy, meaning the maximum credit base for these leased systems is $12,000 and the maximum available credit is $4,560 (6,000 watts x $2.00/watt=$12,000 x 38%=$4,560).

Act 131 establishes a credit cap for both purchased and leased systems. The credit cap for both system types establishes the maximum amount of tax credits that may be granted for a given fiscal year. Further, the credits are required to be granted based on a first-come,
first-served basis as determined by the taxpayer’s Louisiana income tax return receive date – filing sooner rather than later is imperative if you are interested in taking this credit.

Any returns claiming a solar energy systems tax credit must now be filed electronically and will not be considered received for purposes of the first-come, first-served requirement until all supporting documentation is received. In the event the total amount of credits claimed in any particular fiscal year exceeds the amount authorized to be granted, the excess requests shall be treated as having been applied for on the first day of the subsequent year and the taxpayer may claim the credits by filing an original return in the subsequent fiscal year during which the taxpayer’s claim has priority.

The biggest take-away for taxpayers interested in claiming the solar credit is to file your complete tax return as early as possible. For help getting started on your Louisiana state tax return, get in touch with us TODAY!

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