The scenario, as you describe it, is generally correct.
However, note that on Arizona Form 140, which can be found on the Arizona Department of Revenue's Individual Income Tax Forms page, the Family Income Tax Credit and the Dependent
Tax Credit will be applied to your tax liability first, if you're eligible.
If either of those credits are applied, they'll reduce or eliminate any solar credit you could claim for the year. And, if that's the case, any unused amount of the solar credit would be carried over to your next tax year.
The Credit for Solar Energy Devices is claimed on Form 310, and the total credit amount from that form is transferred to Form 301.
Line 32 of Form 301 applies any Family Income Tax Credit from Form 140, line 50, and any Dependent Tax Credit from Form 140, line 49, to your tax liability, before taking any other tax credits on Form 301 into account. So, your tax liability could be reduced or eliminated before your solar credit is applied.
If this isn't the issue that's affecting you, you might want to take a look at the Instructions for Form 310, which you can find on the Arizona Department of Revenue's Tax Credits Forms page, just to make sure that you qualify for the credit.
I'd also suggest you review your responses in the Solar and Wind Energy Devices portion of the Arizona interview in TurboTax.
Make sure that you answered the Compliance Certificate information and, if necessary, the Self-Installed Device information, appropriately in the TurboTax interview. According to the instructions linked above:
The person who sells you your solar energy device must furnish you with a certificate stating that the solar energy device complies with Arizona's solar energy device requirements. If you designed and installed the system yourself, you will not receive such a statement, but your solar energy device must meet the required criteria.
To review your information in TurboTax Online:
- Open TurboTax Online
- Select Tax Home in the left pane
- On the Hi, let's keep working on your taxes! screen, select the dropdown on the right side of the State Taxes box, then select Start, Continue, or Review/Edit
- In the left pane, select Prepare State
- Proceed through the screens until you come to the Status of your state returns screen
- Select Start, Continue or Edit to the right of Arizona.
- Proceed through the state screens until you come to the Other Nonrefundable Credits screen. Make sure the box next to Solar and wind energy devices (Form 301) is checked, then select Continue
- Select the appropriate responses on the Solar and Wind Energy Devices screen, then select Continue
- Select the appropriate response on the Compliance Certificate screen, then select Continue
@epiphanycz
