HI SB3183

Beginning December 31, 2026, taxpayers with adjusted gross income of $250,000 or more (individual or joint filers) are prohibited from claiming the renewable energy technologies income tax credit for solar energy systems on single-family residential properties.

Exemptions to the income restriction include third-party financing arrangements for solar systems and solar water heating systems for household use.

Income thresholds for taxpayers to elect refunds of excess tax credits increase from $20,000 to $40,000 for individual filers and from $40,000 to $60,000 for married couples filing jointly.

The bill maintains existing credit rates of 35% for solar energy systems and 20% for wind-powered systems, with various cap amounts based on property type (ranging from $2,250 for residential solar water heating to $500,000 for commercial systems).

Effective date is April 19, 2042, applying to taxable years beginning after December 31, 2026.