SRECs and Taxes: Should you claim the income?

We get this question a lot, and we must make the following disclaimer before providing guidance:

**CSG is not an accounting firm, so we cannot give any specific advice to you on how your REC payments should be handled.  A tax accountant or tax lawyer should be consulted for definitive answers.

Does CSG provide 1099s?

No. We have been advised by our accountant that there is no need for us to send out 1099’s to our customers. 

The reasoning behind this is that REC income is offsetting an investment made in solar, and as long as the overall investment has not become profitable, the REC payment does not impact your income taxes. 

If you have begun to profit from your solar system through claiming incentives or any other reason, then you should report it to the IRS and pay taxes on the revenues.

How can I claim the income without a 1099?

If you choose or are advised to claim your SREC earnings, you do not need a 1099. You can claim any miscellaneous earnings on the "Other Reportable Income" portion of your state and federal tax filing. 

Ultimately, we recommend that you discuss this with your tax professional to properly allocate it on your tax return.