Relating to the solar energy system tax credit available against the individual and corporate income tax, the franchise tax, the moneys and credits tax, and including effective date and retroactive applicability provisions

For solar energy systems completed on or after January 1, 2021, the bill allows a taxpayer to calculate the solar energy system tax credit amount as a percentage of the federal energy credit or calculate the solar energy system tax credit amount pursuant to the new Iowa solar energy system tax credit created in the bill. The bill creates a residential solar energy system tax credit equal to percent of the gross cost of the system, up to $5,000. The bill creates a separate commercial solar energy system tax credit not to exceed percent of the gross cost of the system, up to $20,000. The bill defines “residential solar energy system” to mean a solar energy project on residential property or multiresidential property. The bill defines “commercial solar energy system” to mean a solar energy system on a property that is not residential or multiresidential. Any tax credit approved under the bill is not refundable but the excess for the tax year may be credited to the tax liability for the following years or until depleted, whichever is earlier. The tax credit is available against the individual and corporate income taxes, the franchise tax, and the moneys and credits tax. A taxpayer eligible to claim a credit under the bill is not eligible to claim a renewable energy tax credit under Code chapter 476C. The bill provides that a taxpayer may claim more than one tax credit, but may claim only one credit per separate and distinct solar energy system installation. The bill permanently increases the maximum cumulative value of tax credits that may be claimed during the year from $4 million to $10 million. The bill eliminates the wait list for the tax credit by removing the maximum cumulative value of tax credits that may be claimed in a year for calendar year 2021 until the wait list is eliminated. If the wait list is eliminated during calendar year 2021, the maximum cumulative value of tax credits that may be claimed during calendar year 2021 shall not exceed the maximum cumulative value established in the bill, $10 million. The bill takes effect upon enactment and applies retroactively to January 1, 2021, for tax years ending on or after that date.