Solar panel tax credit

Forum|Forum|3 years ago
November 16, 2022
4 replies
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We installed solar panels on our primary family home this year. How do I claim the tax credit? If the rebate/credit is greater than my liability, do I get a refund check, or does it carry over to the following year? If it Carrie’s over, is there a time limit when it must be used by?

Best answer by Danielle_B

Hi @BrailMethod!

To claim the solar credit, please follow these steps:

In TurboTax, open your tax return
Click on Federal in the left-hand column, then on Deductions & Credits on top of the screen
Scroll down to All Tax breaks, locate the section Your Home and click on Show more
Click Start next to Home Energy Credits (see screenshot)
Follow the interview to enter your information.

The credit is nonrefundable, meaning it cannot create a refund for you.

If in 2022 you end up with a bigger credit than you have income tax due — a $3,000 credit on a $2,500 tax bill, for instance—you can't use the credit to get money back from the IRS. Instead, you can carry the credit over to the following tax year.
- Note - this does not mean that you will not get a refund; it just means that the credit cannot create the refund. If you have other withholdings or refundable credits, you may still get a refund. But the solar energy credit cannot reduce your tax liability below 0.
The credit continues to carry forward until it is fully used up (no time limit)

Danielle_BAnswer

Hi @BrailMethod!

To claim the solar credit, please follow these steps:

In TurboTax, open your tax return
Click on Federal in the left-hand column, then on Deductions & Credits on top of the screen
Scroll down to All Tax breaks, locate the section Your Home and click on Show more
Click Start next to Home Energy Credits (see screenshot)
Follow the interview to enter your information.

The credit is nonrefundable, meaning it cannot create a refund for you.

If in 2022 you end up with a bigger credit than you have income tax due — a $3,000 credit on a $2,500 tax bill, for instance—you can't use the credit to get money back from the IRS. Instead, you can carry the credit over to the following tax year.
- Note - this does not mean that you will not get a refund; it just means that the credit cannot create the refund. If you have other withholdings or refundable credits, you may still get a refund. But the solar energy credit cannot reduce your tax liability below 0.
The credit continues to carry forward until it is fully used up (no time limit)

TJ96

Why does TurboTax 2022 only give 26% tax credit for solar panels when the law is 30%?

DoninGA

Employee

@TJ96 wrote:

Why does TurboTax 2022 only give 26% tax credit for solar panels when the law is 30%?

The IRS has not finalized the Form 5695, Residential Energy Credits, for tax year 2022. The TurboTax software and form 5695 will be updated after the IRS releases the 2022 form.

TurboTax website for IRS forms availability - https://care-cdn.prodsupportsite.a.intuit.com/forms-availability/turbotax_fed_online_individual.html

Form 5695, Residential Energy Credits for tax year 2022 is estimated to be available for filing on 02/09/2023

Paul_W1

Hi BrailMethod,

Congrats on the solar panel install. The residential energy credit has been extended to 2034. You can get a tax credit 30% of the purchase cost. This will help lower tax liability or possibly to increase tax refund. The form 5695 will be generated. Using Turbo Tax online or desktop will produce it once you complete the interview. Any unused credit will carry forward until it is used up. If you are due a refund, you can get it process via bank refund direct deposit. So if you have tax liability of $1,000, and you have a credit of $2,000 then the the excess will just carry forward until used/exhausted in the following year(s). Hopefully this helps. Happy holidays.

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Cindy1323

So I just want to clarify, since I am self employed and my tax liability varies each year... does any unused tax credit for the solar panels carry over for just 1 year, 5 years, 10 years, until it is used up?

I keep getting conflicting information from several sources.

DoninGA

Employee

@Cindy1323 wrote:

So I just want to clarify, since I am self employed and my tax liability varies each year... does any unused tax credit for the solar panels carry over for just 1 year, 5 years, 10 years, until it is used up?

I keep getting conflicting information from several sources.

The unused credit carries over to the following tax years until it is used up.

KMYBERRY8292

My solar tax credit should be 18,900

Based on 30% of $63,000. I am not seeing proper rebate.

PatriciaV

Employee

Please clarify what amount of rebate is appearing on your return and where you see this number.
@KMYBERRY8292

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christysnook

Hi and thank you for talking with me directly today!

I want to know if (part) of my tax credit for solar panels is being carried over to next year. 'Just looking for verification on that because I can't find it on the website.

Sincerely,

Christy