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Money left over is taxable with ‘refundable’ tax credit

By June Watanabe

POSTED: 01:30 a.m. HST, Jul 16, 2012

~~<p>Question: We purchased our photovoltaic system in 2011. When we filed our federal and state income taxes, we got a refund from the state for $1,500. But I was told that when we file taxes for 2012, we need to include the $1,500 refund from the state as income. Does this make any sense? Why give us a credit for installing an energy-saving photovoltaic system if we must now claim the energy credit as income on next year&rsquo;s taxes? I called the state tax office and spoke to two different people, and they told me the same thing but they couldn&rsquo;t tell me why.</p>
<p>Answer: The explanation was given in an October 2010 news release issued by the state Department of Taxation: <a target="_blank" href="http://www6.hawaii.gov/tax/tir/tir10-10.pdf">www6.hawaii.gov/tax/tir/tir10-10.pdf</a>.</p>
~~

Question: We purchased our photovoltaic system in 2011. When we filed our federal and state income taxes, we got a refund from the state for $1,500. But I was told that when we file taxes for 2012, we need to include the $1,500 refund from the state as income. Does this make any sense? Why give us a credit for installing an energy-saving photovoltaic system if we must now claim the energy credit as income on next year’s taxes? I called the state tax office and spoke to two different people, and they told me the same thing but they couldn’t tell me why.

Answer: The explanation was given in an October 2010 news release issued by the state Department of Taxation: www6.hawaii.gov/tax/tir/tir10-10.pdf. Login for more...



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