My home energy credit appears to be calculating as a deduction in the system instead of a credit - is anyone else running into this issue?

Forum|Forum|1 year ago
January 17, 2025
1 reply
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I went through the Home Energy Credits section in Tax Breaks and entered the expense (~$36k) and my expected federal refund went up by ~$200 instead of the $10k+. Having read quite a bit of tax code this appears to be incorrectly calculating.

DoninGA

Employee

The credit can only reduce your tax liability to Zero. Any remaining credit is carried over to the next tax year.

Look at your Form 1040 Lines 16 thru 24. Is your Total Tax on Line 24 $0

You can view your Form 1040 plus Schedules 1, 2 and 3 at any time using the online editions. Click on Tax Tools on the left side of the online program screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

iridiumbearAuthor

Thanks DoninGA. My tax liability is still significant and nowhere near zero, so I don't think this is the issue.

DoninGA

Employee

You would only receive a 30% tax credit if you installed items eligible for the Residential Energy Credit -

Qualified solar electric property costs
Qualified solar water heating property costs
Qualified small wind energy property costs
Qualified geothermal heat pump property costs
Qualified battery storage technology costs
Qualified fuel cell property costs

Or did you have Qualified Energy Efficiency Improvements installed -

For the energy efficient home improvement credit, the lifetime limitation has been replaced by an annual credit limit. A 30% credit, up to a maximum of $1,200, may be allowed for:
• Insulation material or air sealing material or systems;
• Exterior doors;
• Windows and skylights;
• Central air conditioners;
• Natural gas, propane or oil water heaters;
• Natural gas, propane or oil furnaces or hot water boilers;
• Improvements or replacement of panelboards, subpanelboards, branch circuits or feeders; and
• Home energy audits.

Look at Schedule3 Line 5a and 5b. This amount flows to Form 1040 Line 20