On T-REX the ITC, (Investment Tax Credit) can be defined per project. The user can define the ITC under the CapEx & Tax tab within the Project Editor. The ITC is a US Federal Tax Incentive for Business Investment which allows individuals or businesses to deduct a certain percentage of investment costs from their taxes. 

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There are three ITC inputs within T-REX:

  • ITC Rate (%): The tax credit percent of the cost of the system.
  • ITC Basis Reduction (%): The percent of the ITC to be reduced before depreciation calculation.
  • ITC Spread Options: ITC benefit is either credit once at the first year or spread over tax payment dates, at the first year, or custom.
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ITC Rate (%)

Allows users to set the percentage to be multiplied by the cost of a project.  

ITC Basis Reduction (%)

Allows users set the percentage out of the ITC, to be reduced before depreciation is granted.

Example: $1,000,000 cost of project with ITC rate of 30% will credit the business with ITC = $300,000. If basis reduction is 50%, then $150,000 is reduced from $1,000,000. If basis reduction is 50%, then $150,000 is reduced from $1,000,000. When depreciation is calculated it's done upon $850,000 and not on $1,000,000.

ITC Spread Options 

Allows users to distribute Tax Income Credits (ITC) dynamically over time.

There are three options to spread the ITC:

 

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  1. Spread over the first year: The ITC will be split into a few payments through the first year.
  2. In the first period: The ITC will be credited back at once, the whole amount at the first tax payment event.
  3. Custom ITC spread: The ITC will be split into a few payments defined by the user

Upon choosing Custom ITC spread, users can edit the following columns:

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  • ITC Spread Frequency: The user can now set the frequency of the payments to monthly or yearly.
  • ITC Schedule: The user can set the exact periods and percentage of the payments.