Wednesday, February 17, 2010

Is SREC Income Taxable?


I asked SRECTrade this question. It turns out that this is as murky a question as we suspected. They sent me an informative blurb, which consists in part of a post from a blog similar to mine that originates in Maryland (great resource by the way, check it out: www.solarpvhome.com).





Here's a link to the blurb from SRECTrade:

http://www.srectrade.com/blog/srec/taxes

The position of Michael, the Maryland solar blogger, is that SREC income is not taxable because a profit on the solar electric system will not be generated until the entire system is paid off.

SRECTrade recommends consultation with a professional accountant but adds this:

Is the income generated from SRECs considered taxable income?


Questions constantly arise regarding the tax treatment of SRECs and it seems that no legislative body or government agency has explicitly answered the question. For example, the New Jersey Office of Clean Energy, the pioneer in SREC markets, provides the following information in their FAQs:

Is SREC income taxable? Will I be issued a 1099 if I sell my SRECs? Is there sales tax on an SREC?

- There is not a definitive ruling on this issue. We recommend you discuss the issue with your tax accountant and perhaps a tax lawyer.

SRECTrade doesn't even issue 1099 forms.

My plan is to hand the issue to my accountant and let him decide. Based on what I've seen here my own opinion is that the income is not taxable.

Edit: see the March 20 blog post. That's where I decided that for me, SREC income is not taxable.

6 comments:

Anonymous said...

Have you gotten an update from your Accountant on whether the SRECs are taxable or not?

dave c. said...

I just finished collecting all my tax documentation and will be passing it to my accountant today. I'll send him an email about the SRECs and see what he says. Sorry I'm so slow on that...

Anonymous said...

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Anonymous said...

And the answer is?

Dave Conifer said...

The answer I settled on is described in the March 20 blog post.

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