Question

Full solar tax credit being applied by TurboTax and is now showing a sizeable refund. I thought it was only supposed to cover tax liability?

Forum|Forum|5 years ago
April 15, 2021
1 reply
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The last bit of tax info I entered into TurboTax this year was related to the solar panels we had installed in 2020. Right before entering this info, we *owed* ~$1600 (Federal). Based on the cost of the solar install, we qualified for a credit of ~$4600. My understanding of the solar tax credit is that only the amount needed to cover our tax liability would be applied. Instead, once I entered the details related to the solar panel install, Turbotax quickly shot our federal *refund* up to around $3000 (i.e. applied our full solar install credit instead of simply covering the tax liability). I don't think this is right, but I'm not sure how to change it. I mean, I'd like $3k as much as the next person, but from my reading of the solar tax credit, this isn't how it should work. Help?

TurboTax Deluxe Online

ColeenD3

Yes, the credit is not refundable. First, double check you entries for a possible mistake. Next, if you don't find one, print out copies of your return, with and without the credit, to see where the changes are. You will need to go line by line to track the discrepancy.

Solar tax credit amounts

Installing renewable energy equipment in your home can qualify you for a credit of up to 30% of your total cost. The percentage you can claim depends on when you installed the equipment.

30% for equipment placed in service between 2017 and 2019
26% for equipment placed in service between 2020 and 2022
22% for equipment placed in service in 2023

As a credit, you take the amount directly off your tax payment, rather than as a deduction of your taxable income.

M

MHJemison

Re: The solar tax credit shown on the tac credit form is $5500 dollars and they are holding the remaining credit of $17,000 dollars until next years taxes. Why are they holding the one portion?