NEIL ABERCROMBIE

FREDERICK D. PABLO

GOVERNORDIRECTOR OF TAXATIONBRIAN SCHATZRANDOLF L. M. BALDEMORLT. GOVERNOR

DEPUTY DIRECTOR

STATE OF HAWAII

DEPARTMENT OF TAXATIONP.O. BOX 259
HONOLULU, HAWAII 96809

PHONE NO: (808) 587-1540
FAX NO: (808) 587-1560

August 15, 2012

DEPARTMENT OF TAXATION ANNOUNCEMENT NO. 2012-01
Re:Composite Filing of Forms N-342 and/or N-342A for Taxpayers Claiming theRenewable Energy Technologies Income Tax Credit, HRS § 235-12.5 for 10 or MoreSystems

The Renewable Energy Technologies Income Tax Credit (“Renewable Energy Credit”) provided
by § 235-12.5, Hawaii Revised Statutes (“HRS”), is claimed by filing a separate Form N-342 foreach eligible system for which the taxpayer is claiming the Renewable Energy Credit.
In the case of a partnership, S corporation, estate, trust, or condominium apartment association,
the entity is required to prepare a separate Form N-342A for each partner, member, shareholder,or beneficiary to indicate the partner’s, member’s, shareholder’s, or beneficiary’s prorated shareof the credit. Generally, the entity must use a separate form for each eligible system.
In order to ease the administrative burden on taxpayers, the Department of Taxation (the“Department”), will allow taxpayers to file composite Form(s) N-342 and composite Form(s) N342A in certain situations. However, the composite filing of Form(s) N-342 and Form(s) N342A shall not change the calculation and application of the Renewable Energy Credit asprovided for by § 235-12.5, HRS. This Tax Announcement outlines the procedures by which
qualifying taxpayers may file composite Form(s) N-342 and N-342A.
I. Who May File a Composite Form N-342 or Form N-342A
A. Composite Form N-342. Any individual or corporate taxpayer who is eligible to claim
the Renewable Energy Credit for 10 or more systems or distributive shares of systems
installed and placed in service in a single taxable year may file a composite Form N-342.
B. Composite Form N-342A. Any partnership, S corporation, estate, trust, or condominium
apartment association that has installed and placed in service 10 or more systems in asingle taxable year may file composite Form(s) N-342A.
II. For Which Taxable Years May a Composite Form N-342 or N-342A be Filed
A taxpayer who qualifies to file a composite Form N-342 and/or Form N-342A may do so fortaxable years that begin on or after January 1, 2011.
III. When Must a Composite Form N-342 be Filed
All claims for the credit, including amended claims, must be filed on or before the end of theDepartment of Taxation Announcement No. 2012-01
August 15, 2012
Page 2 of 7

twelfth month following the close of the taxable year for which the credit may be claimed.
IV. Where to File
Attach the composite Form N-342 to the taxpayer’s Hawaii income tax return (“income taxreturn”) along with all other required forms, schedules, and attachments and submit the complete
income tax return to the Department in the manner prescribed in the applicable Hawaii income
tax return instructions. A composite Form N-342 cannot be electronically filed at this time.
In addition, the taxpayer must also submit a “soft” or electronic copy of the composite Form(s)N-342 and the Composite Schedule(s) for Form N-342 to the Department in one of the followingways:
Email to: Tax.Directors.Office@hawaii.gov

Mail or hand-delivery to:o Department of Taxation
Attn: Director’s Office
830 Punchbowl StreetHonolulu, HI 96813
o Composite Form(s) N-342 and Composite Schedule(s) for N-342 (Form N-342C
for tax years 2012 and later) must be written/stored on a digital media storage
source such as a CD-R or DVD-R


Note: Digital media storage sources will not be returned by theDepartment.

V. How to File a Composite Form(s) N-342 to Claim Multiple Renewable Energy Credits
A taxpayer that elects to file a composite Form(s) N-342 must attach to the taxpayer’s Hawaii
income tax return the following forms and schedules in the order listed:(1) Composite Form(s) N-342,(2) Composite Schedule(s) for Form N-342 (Form N-342C for tax years 2012 and later)(3) Form(s) N-342A (if required, see below),(4) Composite Schedule(s) for Form N-342A, (Form N-342B for tax years 2012 andlater), (if required, see below), and(5) Any other form(s) or schedule(s) required to claim to the Renewable Energy CreditFailing to properly file and/or comply with the terms and conditions for composite filing may
result in the disallowance of all or part the credits and the revocation of the election to composite
file.
VI. What Information Must Be Reported
A. Composite Form N-342

Department of Taxation Announcement No. 2012-01
August 15, 2012
Page 3 of 7

Print the word “COMPOSITE” in capital letters at the top of each composite Form N-342,
Renewable Energy Technologies Income Tax Credit.
B. Credit Election
A separate election may be made for each separate system that generates a renewableenergy tax credit. Once an election is made, it is irrevocable. Taxpayers filing acomposite Form N-342 may elect to claim all the credits as refundable, all the credits asnonrefundable, or a combination of both.
For example, a taxpayer who has installed and placed in service 11 systems during ataxable year may claim 11 refundable credits, or 11 nonrefundable credits, or acombination of refundable and nonrefundable credits (e.g., 5 non-refundable credits and 6
refundable credits). The taxpayer may not make separate elections to apportion the credit
for a single system. Thus, the taxpayer may not elect refundable credits for 5.5 systems
and nonrefundable credits for 5.5 systems.
1. Single Election
A taxpayer filing a composite Form N-342 who elects all refundable credits (or all nonrefundable), must file a single composite Form N-342 which reflects the aggregate amounts foreach required line item. Therefore, taxpayers making a single election shall file one Form N-342(representing all systems).
2. Dual Elections
Taxpayers electing a combination of both refundable and non-refundable credits shall file twocomposite Forms N-342. Each composite Form N-342 shall reflect the aggregate amounts foreach required line item according the proportion of the election. Therefore, taxpayers making
separate elections shall file two separate Forms N-342 (one for refundable and one for nonrefundable credits) together with two separate Composite Schedules for Form N-342 (Form N342C for tax years 2012 and later).
C. Composite Schedule for Form N-342 (Form N-342C for tax years 2012 and later)
The taxpayer must also prepare and submit a Composite Schedule(s) for Form N-342. 1 All
information required on the Composite Schedule for Form N-342 must be provided in therequired format.
A taxpayer making separate system elections regarding refundable and non-refundable credit
must prepare two separate Composite Schedules for Form N-342. As noted above, the filing ofcomposite Form(s) N-342 and Composite Schedule(s) for Form N-342 does not change thecalculation and application of the Renewable Energy Credit as provided for by § 235-12.5, HRS.
A taxpayer who receives Form(s) N-342A from an entity through which the taxpayer is claiming
1See Attachment A – Composite Schedule for Form N-342

Department of Taxation Announcement No. 2012-01
August 15, 2012
Page 4 of 7

the Renewable Energy Credit should report its distributive share for each system in a separatecolumn of the Composite Schedule for Form N-342. A taxpayer who receives a composite FormN-342A and Composite Schedule for Form N-342A from an entity shall report each line fromthe Composite Schedule for Form N-342A on a separate column of the Composite Schedule forForm N-342.
Composite Schedule for Form N-342 Header (Form N-342C for tax years 2012 and later)Composite Schedule for Form N-342 for Tax Year __ __ __ __ or Fiscal Year beginning__________and ending __________
Taxpayer’s Name
Taxpayer’s SSN or FEIN
Hawaii Tax ID No. (if any)
“Total Number of Properties” on which systems were installed that are listed on Part II.
of the Composite Schedule for Form N-342.
o If more than one Composite Schedule for Form N-342 is required, the total
number of properties for all Composite Schedules for Form N-342 should bereported on the first Composite Schedule for Form N-342.
“Property Number” must correspond to the order in which the real property addresses arelisted on Part II. of the Composite Schedule for Form N-342.
o For example, if three systems were installed on the first property listed on Part II.
of the Composite Schedule for Form N-342, the property number “1” would beplaced in the row titles “property No.” in the first 3 columns.
Type of System (Solar Water, Other Solar, or Wind)“Date Installed & Placed in Service” of each system

Part I. Corresponding Form N-342 Line Number
Part I. of the Composite Schedule for Form N-342 contains 53 rows, each of which represents acorresponding line on Form N-342. Rows should only be completed if the corresponding line on
the Form N-342 would have been completed.
Each column represents a separate system that was installed and placed in service. Each column
must contain the same information as a single Form N-342. Use additional Composite Schedules
for Form N-342 if more than 10 systems are being reported.
Part II. Physical Property Addresses Where Each System was Installed and Placed in Service
The physical addresses of the real property on which the renewable energy systems wereinstalled and placed in service should be listed in Part II. List the addresses only once, even if
more than one system was installed on that property.
If multiple Composite Schedules for Form N-342 are being submitted, the addresses must be
listed in a continuous numerical order starting with property number “1” on Part II. of the first
Composite Schedules for Form N-342. If there are more than 29 addresses to be reported,
property number “30” should be the first property listed on Part II. of the second Composite
Schedules for Form N-342, and so on.

Department of Taxation Announcement No. 2012-01
August 15, 2012
Page 5 of 7VII. Composite Filing Guidelines for Hawaii S Corporations, Partnerships, Estates,Trusts, or Condominium Associations
Every Hawaii S corporation, partnership, estate, trust, or condominium apartment association isrequired to prepare a Form N-342A for each individual or corporate shareholder, member, orbeneficiary, respectively, in order that the prorated amount of such entity’s tax credit may beclaimed by the individual or corporate taxpayer. Generally, the entity must use a separate form
for each eligible system.
A copy of composite Form N-342A and Composite Schedule for Form N-342A (Form N-342Bfor tax years 2012 and later) reflecting the member’s distributive share of the tax credit shall be
issued to that member as required by the Form N-342A Instructions. The entity must also attacha copy of each Form N-342A and Composite Schedule for Form N-342A (Form N-342B for taxyears 2012 and later) issued to its members to the entity’s tax return.
An entity that elects to file a composite Form(s) N-342 must attach to the entity’s income tax
return the following forms and schedules specifically in the order listed:(1) Composite Form(s) N-342,(2) Composite Schedule(s) for Form N-342 (Form N-342C for tax years 2012 and later),(3) Composite Form(s) N-342A,(4) Composite Schedule(s) for Form N-342A (Form N-342B for tax years 2012 and later), and(5) Any other form(s) or schedule(s) required to claim to the Renewable Energy Credit
Failing to properly file may result in the disallowance of all or part the credits and the composite
filing election may be revoked by the Department upon failure to comply with the terms andconditions of this election.
1. Composite Form N-342A
The entity shall prepare a composite Form(s) N-342A for each shareholder, member, orbeneficiary reflecting an aggregate total of the credits being claimed and the shareholder’s,member’s, or beneficiary’s distributive share as generally required. The word “COMPOSITE”
in capital letters must be written at the top of each composite Form N-342A.
2. Composite Schedule for Form N-342A (Form N-342B for tax years 2012 and later)
Each entity shall also prepare a Composite Schedule for Form N-342A (that corresponds to thecomposite Form N-342A) for each shareholder, member, or beneficiary of the entity. 2 All
information required on Composite Schedule(s) for Form N-342A and Form(s) N-342A must be
provided and submitted in the required format.
Composite Schedule for Form N-342A Header
2Composite Schedule for Form N-342A for Tax Year __ __ __ __ or Fiscal Year

See Attachment B – Composite Schedule for Form N-342A

Department of Taxation Announcement No. 2012-01
August 15, 2012
Page 6 of 7


beginning __________and ending __________Name of Issuing Entity (S Corporation, Partnership, Estate, or Trust, or CondominiumApartment Association)
Issuing Entity’s SSN or FEIN
Hawaii Tax ID No. (if any)
Name of the recipient for whom the statement is being prepared
Recipient’s SSN or FEIN
“Property Number” must correspond to the order in which the real property addresses arelisted on Part II. of the Composite Schedule for Form N-342A.
o For example, if three systems were installed on the first property listed on Part II.
of the Composite Schedule for Form N-342A, the property number “1” would beplaced in the row titles “property No.” in the first 3 columns.
Type of System (Solar Water, Other Solar, or Wind)“Date Installed & Placed in Service” of each system

Part I. Corresponding Form N-342A Line Number
Part I. of the Composite Schedule for Form N-342A contains 42 rows, each representing acorresponding line on Form N-342A. Each column must contain the same information as asingle Form N-342A. Rows should only be completed if the corresponding line on the Form N342A would have been completed.
Each column represents a separate system that was installed and placed in service. Use
additional Composite Schedules for Form N-342A if more than 10 systems are being reported.
Part II. Physical Property Addresses Where Each System was Installed and Placed in Service
Each physical addresses of the real property on which the renewable energy systems wereinstalled and placed in service should be listed in Part II. List the addresses only once, even if
more than one system was installed on that property.
If more than one Composite Schedule for Form N-342A is being submitted, the addresses mustbe listed in continuous numerical order starting with property number “1” on Part II. of the first
Composite Schedule for Form N-342A. If there are more than 28 addresses to be reported,
property number “29” should be the first property listed on Part II. of the second Composite
Schedule for Form N-342A, and so on.
3. Instructions for the Individual, Corporate Shareholder, Member, or Beneficiary who Receivesa Composite Form(s) N-342A or 10 or More Forms N-342A
Each individual or corporate shareholder, member, or beneficiary of an entity through which theRenewable Energy Credit is being claimed must attach to the taxpayer’s income tax return thefollowing documents specifically in the order listed:(1) Composite Form(s) N-342,(2) Composite Schedule for Form N-342 (Form N-342C for tax years 2012 and later),(3) Composite Form(s) N-342A (or separate Form(s) N-342A), and(4) Composite Schedule for Form N-342A (Form N-342B for tax years 2012 and later),Department of Taxation Announcement No. 2012-01
August 15, 2012
Page 7 of 7and(5) Any other form(s) or schedule(s) required to claim to the Renewable Energy Credit
Entity members making separate refundabililty elections must follow the election requirements
as set forth above. Specifically, a member making separate elections must prepare two separate
composite Forms N-342 and two separate Composite Schedules for Form N-342.
Multiple Level Pass-Through Entities
For situations in which there are multiple levels of investors in a renewable energy technology
system, each level of investor must prepare and submit the required forms, schedules, andattachments as the “first level” of investors. Since the Renewable Energy Credit is determined atthe entity level, entities that receive Form(s) N-342A which are then required to issue Form(s) N342A to its members must attach to the entity’s tax return specifically in the order listed:(1) Composite Form N-342(2) Composite Schedule for Form N-342 (Form N-342C for tax years 2012 and later)(3) Composite Forms N-342A (one for each member of the entity)(4) Composite Schedules for Form N-342A (one for each member of the entity) (FormN-342B for tax years 2012 and later), and(5) Any other form(s) or schedule(s) required to claim to the Renewable Energy Credit

For more information on this issue, please contact the Technical Section at 808-587-1577 or bye-mail at Tax.Technical.Section@hawaii.gov.

FREDERICK D. PABLO
Director of Taxation

DEPARTMENT OF TAXATION ANNOUNCEMENT NO. 2012-01

ATTACHMENT ACOMPOSITE SCHEDULE FOR FORM N-342

Name

Property No.

COMPOSITE SCHEDULE FOR FORM N-342

SSN or FEIN

Hawaii Tax ID No. (if any)Wfor calendar tax year 2011 or fiscal year beginning __________________, 2011, and ending ____________________, 20______(ATTACH THIS FORM TO YOUR FORM N-342)

Type of System
Date Installed& Placed inService
PART I. CORRESPONDING FORM N-342 LINE NUMBER
123456789101112
13
14
151617181920212223

					NamePART I. CORRESPONDING FORM N-342 LINE NUMBER (CONTINUED)
Property No.
2425262728
2930
3132333435363738394041424344454647
484950515253			

SSN or FEIN

PAGE 2NameCity or TownSSN or FEIN						Address (Number and Street)PART II. PHYSICAL PROPERTY ADDRESSES WHERE EACH SYSTEM WAS INSTALLED AND PLACED IN SERVICE
Property No.

PAGE 3

Postal/ZIP
CodeDEPARTMENT OF TAXATION ANNOUNCEMENT NO. 2012-01

ATTACHMENT BCOMPOSITE SCHEDULE FOR FORM N-342A

COMPOSITE SCHEDULE FOR FORM N-342A

Name of issuing entity (S Corporation, Partnership, Estate, or Trust, or Condominium Apartment Association)

Recipient’s SSN or FEIN:

Issuing entity’s SSN or FEIN

Hawaii Tax ID No. (if any)Wfor calendar tax year 2011 or fiscal year beginning __________________, 2012, and ending ____________________, 20______(ATTACH THIS SCHEDULE TO FORM N-342)

Name of recipient for whom this statement is being prepared:

Property No.
Type of System
Date Installed& Placed inService
PART I. CORRESPONDING FORM N-342A LINE NUMBER
123456789101112131415161718

Name of recipient for whom this statement is being prepared:

Name of issuing entity

Recipient’s SSN or FEIN

Issuing entity’s SSN or FEIN

PART I. CORRESPONDING FORM N-342A LINE NUMBER (CONTINUED)
Property No.
192021222324252627282930313233343536373839404142

PAGE 2Name of the recipient for whom this statement is being prepared:

Name of issuing entity

Recipient’s SSN or FEIN

Issuing entity’s SSN or FEIN

Address (Number and Street)

City or Town

PART II. PHYSICAL PROPERTY ADDRESSES WHERE EACH SYSTEM WAS INSTALLED AND PLACED IN SERVICE
Property No.

Postal/ZIP
Code