Taxable Income from Solar

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If you are participating in the Ontario MicroFIT solar power generation program, you should be aware that the money you receive is taxable income. This is unfamiliar ground for many people, so here is some information you will need to complete your taxes.

Income can be reported as business income or as personal income. You can deduct expenses against the income including house insurance, maintenance costs, loan interst and depreciation of the equipment.

The depreciation of your solar panels and solar equipment can be written off as an expense against your taxable income from solar. The rules state that you cannot create a loss from the depreciation, so if you are using tax software, you may need to override the calculated depreciation amount so that your income equals $0 (for TurboTax, you need to press F2 to override the "CCA for the Year" calcualted field).

You will also need to know the Industry Code for the T2125 Statement of Business or Professional Activities form.

• Industry Code = 221119 - Other Electric Power Generation

We hope you find it useful, and we would love to hear your feedback.