Code of Massachusetts Regulations › 830 CMR - DEPARTMENT OF REVENUE › Title 830 CMR 62.00 - Income tax › Section 62.6.1 - Residential Energy Credit

Current through Register 1525, July 5, 2024
(1)
General
. An owner or tenant of a residential property
			 located in the Commonwealth who is not a dependent of another taxpayer and who
			 occupies the residential property as his or her principal residence is allowed
			 a solar and wind energy credit ("energy credit"
)
against personal
			 income tax equal to 15% of the net expenditure for renewable energy source
			 property, or $1000, whichever is less.
See
M.G.L. c. 62,
			 § 6(d). The $1000 credit limitation applies to all renewable energy source
			 expenditures made by an owner or tenant ("taxpayer") with respect to his or her
			 principal residence.
(2)
Definitions
.
Internal Revenue Code
. The Internal
				Revenue Code, as amended on January 1, 1988, and in effect for the taxable
				year.
Net Expenditure
. The total of the
				purchase price for any renewable energy source property, plus installation
				cost, but less any credits received under the Internal Revenue Code and less
				grants or rebates received from the United States Department of Housing and
				Urban Development.
Renewable Energy Source Property
.
				Property, including materials and component parts thereof, separately purchased
				and assembled by the residential property owner or tenant which, when installed
				in connection with a dwelling, transmits or uses solar energy or other form of
				renewable energy for the purposes of heating or cooling such dwelling or
				providing hot water for use within such dwelling, or for producing electricity
				for such purposes; wind energy for nonbusiness residential purposes is also
				renewable energy source property. To qualify as renewable energy source
				property, the original use of the property must begin with the taxpayer, the
				property must reasonably be expected to remain in operation for at least five
				years, and the property must meet quality standards as prescribed by 830 CMR
				62.6.1.
Except as stated in 830 CMR 62.6.1, renewable energy source
				property does not include heating or cooling systems used to supplement
				renewable energy source equipment in heating or cooling a residence when such
				systems employ a form of energy other than solar or wind. For example, heat
				pumps or oil or gas furnaces used in connection with renewable energy source
				property are not renewable energy source property.
Solar Energy Property
. Property which,
				when installed in connection with a dwelling, transmits or uses solar energy
				directly to heat or cool a dwelling or to provide hot water for use within a
				dwelling, or to produce electricity for such purposes, and which otherwise
				meets the requirements of 830 CMR 62.6.1 for renewable energy source property.
				Property which uses fuel or energy only indirectly derived from solar energy,
				such as fossil fuel or wood, is not solar energy property.
Passive and active solar systems, and portions of the structure
				of the principal residence when the sole purpose of such portions is to
				transmit or use solar radiation or to enhance the collection and storage of
				solar energy by such systems, are solar energy property. For example, root
				ponds, roof collectors, freestanding thermal containers, and non-window glazing
				may qualify for the credit. However, portions of the structure of a principal
				residence, equipment, and materials which serve a dual purpose along with
				energy transmission (
i.e
., that serve as a structural
				component of the residence or that have a significant structural function) are
				not solar energy property. For example, roofs, windows, walls, and greenhouses
				are not solar energy property.
Examples of items that may qualify as solar energy property
				include collectors used to absorb sunlight and create hot liquids or air,
				storage tanks to store hot liquids, rockbeds to store hot air, thermostats to
				activate pumps or fans which circulate hot liquid or air, and heat exchangers
				which use hot liquids or air to create hot air or water.
Wind Energy Property
. Property which,
				when installed in connection with a residential property, transmits or uses
				wind energy to produce energy in any form for nonbusiness residential purposes
				and which otherwise qualifies as renewable energy source property. Wind energy
				property generally uses wind to generate electricity, or mechanical forms of
				energy. Windmills and wind-driven generators are examples of wind energy
				property.
(3)
Qualifying Expenditures
. Only net expenditures paid
			 with respect to renewable energy source property used in connection with the
			 taxpayer's principal residence may be used to compute the amount of the credit.
			 The term "in connection with" includes, but is not limited to, renewable energy
			 source property in or on a principal residence or residential property.
(a)
Principal
			 Residence
. A taxpayer must be a resident of Massachusetts for his
			 or her principal residence to be in Massachusetts. If a taxpayer is resident in
			 Massachusetts and has only one place of residence, that place of residence is
			 the taxpayer's principal residence. If a taxpayer is resident in Massachusetts
			 and has more than one place of residence, the determination of which place of
			 residence is the taxpayer's principal residence depends upon all the facts and
			 circumstances in the case, including the number of days spent at each place of
			 residence and the good faith representations of the taxpayer.
If an owner or tenant changes his or her principal place of
				residence within a taxable year an energy credit may be claimed for each
				principal residence of the taxpayer, subject to the maximum credit amount of
				$1000. Subject to the requirements of 830 CMR 62.6.1, joint owners of
				residential property may share any energy credit claimed for renewable energy
				source property expenditures in the same proportion as their ownership interest
				in the residential property. Joint owners are subject to the maximum credit
				amount of $1000. Joint ownership includes joint tenancy, tenancy in common and
				tenancy by the entirety. An individual who is a stockholder in a cooperative
				housing corporation, or who is a member of a condominium association with
				respect to a condominium which he or she owns, may claim a proportionate share
				of the renewable energy source expenditure of such condominium association or
				cooperative housing corporation. A cooperative housing or condominium unit may
				be treated as a "principal residence" for purposes of the $1000 credit
				limitation.
(b)
Renewable Energy Source Property
. Only renewable
			 energy source property used for residential purposes qualifies for the energy
			 credit. When at least 80% of the use of such property is for residential
			 purposes, the entire amount of the renewable energy source expenditure may be
			 used to compute the credit. However, if less than 80% of such property is used
			 for residential purposes, the percent of the amount of the expenditure that
			 must be used to compute the credit is the percent of the property's residential
			 use.
Subject to the requirements of 830 CMR 62.6.1, joint owners of
				renewable energy source property may share any energy credit claimed for
				renewable energy source property expenditures in the same proportion as their
				expenditures for that property. Joint owners are subject to the maximum credit
				amount of $1000 per principal residence.
A renewable energy source expenditure does not include any
				expenditure for any energy storage medium if the primary function of that
				medium is not the storage of energy. For this reason expenditures for
				insulation, storm or thermal windows or doors, caulking or weatherstripping,
				furnace replacement burners, devices for modifying flue openings, furnace
				ignition systems, automatic setback thermostats, energy use meters and similar
				devices and items are not renewable energy source expenditures. In addition,
				the costs of maintenance and repair of installed renewable energy source
				property, or of leasing renewable energy source property, are not renewable
				energy source expenditures.