Tax Credit problem

Forum|Forum|7 years ago
May 31, 2019
10 replies
210 views

15,.385 for a complete new HVAC system in 2015. I expected a 500 tax credit. Only getting 194.. entered the amount in the energy efficient building property box0 HELP!

Best answer by SweetieJean

Solved in comments.

Texas Roger

Level 15

This is a non refundable credit meaning you must have a tax liability for it to offset in order to get it. Was your tax liability only $194 or did you have other credits entered above this credit on the tax return that offset most of your tax liability?

Texas Roger

Level 15

Or did you claim other energy saving credits in prior years that used up a portion of your credit eligibility. The total amount of credit available has a lifetime limit.

Richard154Author

Level 2

no and I did answer that question as no

Richard154Author

Level 2

No other credits and I must be think because I do not understand the first part of your answer.

Texas Roger

Level 15

If you look at line 44 on form 1040 you will see your tax liability (how much you owe before credits are applied). On the lines below line 44 are several credits listed. As you go down the list in order, those credits are subtracted from your tax liability. If there is only $194 left after subtracting any of those credits from your tax liability, that is all the energy saving credit you can get. If you still have unused tax liability that hasn't been offset by the $194, then there may be another issue with how the credit was determined.

Richard154Author

Level 2

Line 44 shows that amount. That is 1% of my taxable income. I mistakenly thought it was 10% of the purchase amount of the HVAC. My ignorance was and is showing

Texas Roger

Level 15

Are you saying that your tax liability on line 44 of form 1040 is $194 which is only 1% of your taxable income? If your tax is only 1% of your taxable income you must have a substantial portion of your income that is from long term capital gains that are being taxed at 0%. The energy credit limit is the lowest of 10% of your cost or $300 or the amount of tax liability not offset by other credits. If you had more than $300 of tax liability not offset, there are two other categories of energy saving improvements that can sometimes be used for HVAC installations to increase your credit amount. They are the advanced main air circulating fan and furnace categories. However, they are of no benefit if your credit is already limited by your tax liability on line 44.