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June 6, 2019
Question

I'm looking into getting solar and the company is explaining to me that the tax credit will help me if I even get a refund that. Is this true?

  • June 6, 2019
  • 13 replies
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I typically pay 4100 and federal tax but get 1100 back. They told me that the 2900 I am supposed to pay is a tax liability so I would get all 4100 back to put towards the solar panels.

13 replies

Lisa995
Employee
June 6, 2019
The solar credit can only be used to offset "income taxes", not self employment taxes or other types of taxes or penalties

Look at a copy of your 1040 tax return, Line 44 (I think) is your tax liability that can be offset by the solar credit....is that amount the $2900 ?
♪♫•*¨*•.¸¸♥Lisa♥ ¸¸.•*¨*•♫♪
June 6, 2019
I do not get at 10:40. I get a W-2. What the solar guy is telling me is I owe Uncle Sam $2,900 every year but I am paying him $4,100. When I look at my pay stub I can see how much federal tax I am paying.
June 6, 2019
So essentially what he is saying is it would be like I wouldn't pay taxes at all. That money at the end of the year would come back to me and I could put it towards the solar panels. I just want to make sure this is true before I get them installed and then find out if the end of the year I don't get that credit back.
Employee
June 6, 2019
Your 1040 in the tax return that you file.
<a rel="nofollow" target="_blank" href="https://www.irs.gov/pub/irs-pdf/f1040.pdf">https://www.irs.gov/pub/irs-pdf/f1040.pdf</a>
SteamTrain
Employee
June 6, 2019
...and you put your W-2 income into that "Form 1040" tax return .

The BUT point was that if you have self-employment income also, it won' offset the SE taxes for that....which is why they pointed to line 44 of the form 1040 that you sent/send to the IRS. because that line is what the credit would offset (or line 30 of last year's 1040A if that's what you actually filed for 2017).  Of course, this assumes your income for 2018 is similar to 2017.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
June 6, 2019
2016 was 3,995 and 2017 was 2,496. I was deployed in 2017 so most of my taxes were exempt. But those are the numbers of what I owe the federal government. How would it work for state?
Critter
Employee
June 6, 2019
So ... in 2016 the max the credit that could have been used  was  3995  and 2496 in 2017... any unused credit is carried forward. You may not get the max if you have other non refundable credits which are used first to allow more of the solar credit to be carried forward.  So if you are putting the panels in 2018 then your tax liability (line 44) less the nonrefundable credits used is what the benefit will be in 2018 and the unused portion is carried forward.
June 6, 2019
So let's say this year I pay 5000 to federal taxes when I only needed 3995. Does that mean I'll get $5,000 back? And I'll just put that towards the solar panels? Also are you familiar with how South Carolina state works?
SteamTrain
Employee
June 6, 2019
Call it $4000 and $5000.  You'd normally get $1000 back.   But the credit would be applied to the other $4000.   

It really depends on the size of the proposed credit ...if the credit is less than $4000 then you don't get it all back...if the credit is greater than $4000, then you get the whole $5k and the excess will get carried over to be (possibly) used the next year(s).

SC ..don't know myself..I would only know if I googled it, and you can do that easier than myself..and it might only apply if you are an actual SC  resident for income tax purposes....not just posted there.  But different states might apply their solar credits differently......and some allow none at all.
____________*Answers are correct to the best of my knowledge when posted, but should not be considered to be legal or official tax advice.*
June 6, 2019
I believe my Federal Credit was around $8,500 and my state was around $7,300. My total system cost was going to be $29,000. In my electric company will give me a rebate in the form of a check of $7,800. It would make my total system cost $5,600.