New Tax Regulations Help Further Low Income Solar

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Posted: Monday, April 11, 2016 10:06 pm

WASHINGTON, D.C. -- Newly published regulations from the IRS will help more low-income residents benefit from solar installations. The IRS issued temporary rules to clarify the Low-Income Housing Tax Credit’s utility allowance regulations, which allow people who fall into the low-income category to receive a tax credit.

The final regulations state that utility costs paid by a tenant are treated the same as submitting payment directly to the utility company. The temporary regulations extend the principles of these sub-metering rules to situations in which a building owner sells energy to tenants that is produced from a renewable source and not delivered by a local utility company. Essentially, this preserves eligibility for LIHTC assistance if they receive electricity from solar rather than a utility.

Qualification for this sub-metering treatment, however, depends on how tenants are charged for the renewable energy. To the extent that tenants consume this energy, charges by the building owner must not exceed the rates that the local utility company would have charged if the tenants had instead acquired the energy from that company.

SOURCE: U.S. Department of Energy

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