2024 Turbo Tax says Residential Energy Credit limit is $1200; IRS disagrees

Forum|Forum|1 year ago
December 20, 2024
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2024 Turbo Tax does not yet have the Residential Energy Credits functionality available. However the Help for this section says "The residential clean energy property credit equals the lessor of $1,200 or 30 percent of what a homeowner spends on qualifying property". (Note that that should be "lesser", not "lessor".)

However, the IRS documentation, https://www.irs.gov/credits-deductions/residen[product key removed]y-credit, says "The credit has no annual or lifetime dollar limit except for credit limits for fuel cell property. You can claim the annual credit every year that you install eligible property until the credit begins to phase out in 2033."

Is there an explanation for this discrepancy?

Opus 17

Employee

There are several different credits and you are getting them confused.

The Energy Efficient Home Improvement Credit covers improvements to make your home more energy efficient, like doors, windows, insulation, efficient furnace, air conditioning, and so on. This credit has a $1200 annual cap, as well as several sub-caps ($600 for energy property, $600 for windows, $500 for doors). Separate from the general $1200 cap, there is a $2000 cap for installation of an electric or natural gas heat pump water heater, an electric or natural gas heat pump, or a biomass stove or boiler.

Then, there is an entirely different credit called the Residential Clean Energy Credit. This includes solar electric, solar water heating, fuel cell, small wind energy, geothermal, and battery storage. The credit is 30% with no maximum except fuel cells ($500 per half kilowatt) and you can claim the credit in any year you install qualifying property.

redpixelAuthor

Thanks for the reply -- I'm not the one who's getting the credits confused. TurboTax is. But I see now, thanks to your reply, the source of the confusion. The TurboTax help is muddling the "Energy Efficient Home Energy Credit" ($1200 limit) with the "Residential Clean Energy Credit" (no limit), and says that the latter has a $1200 limit. Maybe this will get sorted out when they actually implement this section in January.

Thanks again for the clarification.

Opus 17

Employee

@redpixel wrote:

Thanks for the reply -- I'm not the one who's getting the credits confused. TurboTax is. But I see now, thanks to your reply, the source of the confusion. The TurboTax help is muddling the "Energy Efficient Home Energy Credit" ($1200 limit) with the "Residential Clean Energy Credit" (no limit), and says that the latter has a $1200 limit. Maybe this will get sorted out when they actually implement this section in January.

Thanks again for the clarification.

The interview for the energy credits has a couple of different steps, one for each credit. If the blue help link for one credit actually talks about the other credit, if you can tell me exactly where in the interview, I can contact a moderator internally and recommend a correction.