In 2023, I am installing a solar system that has $4,300 in Federal Investment Tax Credit (ITC). I expect a similar tax situation in 2023 as I had in 2021.
I was recently told in order to claim the full $4,300 credit, my 2023 1040 form must show I have no refund and an underpayment of $4,300 (i.e. I paid less tax than was due by $4,300). This would mean to get the credit, I'd need to adjust my withholdings since I overpaid by $5,000 in 2021 on total federal taxes owed of $36,906.
Based on what I am reading in this discussion the above is incorrect. Basically what I am understanding from this discussion is that in 2023 if I have a federal tax owed of $36,906 and $5,000 refund I'd still get the full $4,300 in Federal Investment Tax Credit (ITC) since my federal taxes owed are more than $4,300. I don't need to worry about adjusting my withholding in order to get the Federal Investment Tax Credit (ITC).
Is my understanding correct?
