Income from Solar Panels

Forum|Forum|6 years ago
June 6, 2019
2 replies
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I got a check from the local energy company paying me for the power that my house sent back into the grid from the solar panels. Am I required to report this? If so.. where do I report it?

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Best answer by CherylW

Yes, you are required to report ALL income unless specifically exempted by the Internal Revenue Code. Income from solar panels isn't exempted.

That type of income is not subject to self-employment tax, so it goes on line 21, Form 1040.

To enter it:

Go to Income.
Select I'll choose what I work on.
On Your 2016 Income Summary, scroll down to Less Common Income.
Click Start or Update by Miscellaneous Income, 1099-A, 1099-C.
Click Start or Update by Other Reportable Income.
Enter the Description and Amount on Other Taxable Income.

The amount should show up on line 21 of your Form 1040. To check,

Go to My Account.
Go to Tools.
Go to View Tax Summary.
Go to Preview my 1040.

CherylWAnswer

Employee

Yes, you are required to report ALL income unless specifically exempted by the Internal Revenue Code. Income from solar panels isn't exempted.

That type of income is not subject to self-employment tax, so it goes on line 21, Form 1040.

To enter it:

Go to Income.
Select I'll choose what I work on.
On Your 2016 Income Summary, scroll down to Less Common Income.
Click Start or Update by Miscellaneous Income, 1099-A, 1099-C.
Click Start or Update by Other Reportable Income.
Enter the Description and Amount on Other Taxable Income.

The amount should show up on line 21 of your Form 1040. To check,

Go to My Account.
Go to Tools.
Go to View Tax Summary.
Go to Preview my 1040.

Candyfoot88

This is NOT income. I am not selling anything. I am only asking to be reimbursed for the overcharge I incurred with my solar panel not collecting properly. Freedom Forever is the company that backs the promise, should my solar panels stope working they are obligated to reimburse for the amount lost.

Opus 17

Employee

@Candyfoot88 wrote:

This is NOT income. I am not selling anything. I am only asking to be reimbursed for the overcharge I incurred with my solar panel not collecting properly. Freedom Forever is the company that backs the promise, should my solar panels stope working they are obligated to reimburse for the amount lost.

It's not necessarily income to you, that's what I am trying to figure out. From the company's point of view, they are required to issue a 1099-MISC if they pay you more than $600 in a year. It's between you and the IRS if the money is taxable, they must issue a 1099-MISC for all payments and then it's your problem to convince the IRS that it is not taxable. There are a couple of ways to do this.

Whether it is or is not taxable income depends on the business relationship, among other things, which I am trying to understand.

Stephmr124

I just got solar panels installed and I'm curious....

Did your electric company send you a 1099 for the surplus energy they purchased or for all energy that was produced?

I'm trying to get ahead of my tax implication for next year and I'm not sure how much "income" I should expect to be taxed on.

Candyfoot88

Last year my solar equipment stop collecting data during the very hot months of the year. This non-collection caused me to incur a very large electric bill. I filed a claim with the company, and they required me to include my yearly amount of electricity used at my residence. After waiting several months to receive my refund, I am now being told I have to submit a W9 in order to get reimbursed. This doesn't make sense to me as I am no an Independent Contractor therefore, I can't offset this amoun on my taxes, I file short form. Is this taxable income and if so how come?

Opus 17

Employee

@Candyfoot88 wrote:

Last year my solar equipment stop collecting data during the very hot months of the year. This non-collection caused me to incur a very large electric bill. I filed a claim with the company, and they required me to include my yearly amount of electricity used at my residence. After waiting several months to receive my refund, I am now being told I have to submit a W9 in order to get reimbursed. This doesn't make sense to me as I am no an Independent Contractor therefore, I can't offset this amoun on my taxes, I file short form. Is this taxable income and if so how come?

The W-9 is used to collect your SSN to issue either a 1099-NEC (independent contractor income) OR a 1099-MISC (other taxable income). If the company reports the income on a 1099, you will have the opportunity to dispute that when you file your tax return.

I can't offer a suggestion about whether or not the payment is taxable without knowing a lot more details of your situation. Do you own the panels or lease them? What company did you make the claim with, the solar company or your electric utility? What is your usual arrangement, do you get paid for the electricity you generate or does it just offset your usage from the grid?