Use Form N-342 to figure and claim the RETITC under section 235-12.5, Hawaii Revised Statutes (HRS). Use one Form N-342 for each system. (Schedule CR Instructions)
If you are the economic owner of an eligible renewable energy technology system that was installed and placed in service in Hawaii during the taxable year, you may claim this credit if:
- You are an individual or corporate taxpayer subject to Hawaii income tax under chapter 235, HRS; OR
- You are a taxpayer subject to Hawaii franchise tax under chapter 241, HRS.
Multiple Owners
Multiple owners of a single system are entitled to a single tax credit. Each owner may claim a portion of the credit based on how much they paid towards the cost of the system subject to the tax credit cap.
The credit is lesser of 35% of the actual cost or $2,250.
Note: Each owner must complete Form N-342 and report their share of the total costs.
Reduced Credit
For a solar energy system, such as a solar water heater or PV system, you must reduce the credit amount by 30%, unless you meet the conditions for the full credit.
Full Credit
If you are an individual taxpayer and any of the following requirements for solar and wind systems apply, you can claim the full credit as refundable:
- All of your (and your spouse's) income is retirement income such as social security or pension distributions that is exempt from Hawaii income tax; or
- Your Hawaii adjusted gross income (AGI) is $20,000 or less ($40,000 if you are filing a joint return).
Irrevocable Election
A married couple that does not file jointly will only be able to make this election to the extent that they would be entitled if they would have filed a joint tax return. When the election is made, the tax credit is refundable and the election cannot be revoked. Amended returns may not be filed to change the tax credit from refundable to nonrefundable.
Total Output Capacity
Systems classified as “Other Solar Energy System” such as a PV system, must meet the total output capacity requirement to qualify for the credit unless an exception applies. The total output capacity requirements are listed below:
- Single-family residential property – 5 kilowatts per system
- Multi-family residential property – 0.360 kilowatts per unit per system
- Commercial property – 1,000 kilowatts per system
For PV systems, total output capacity is the maximum power of the cell, module, or panel at Standard Test Conditions in kilowatts multiplied by the number of cells, modules, or panels installed and placed in service during the taxable year.
Program Pathway
- State
- Credits
- Refundable Credits OR Nonrefundable Credits
- Renewable Energy Tech Credit (N-342)