MinhT
Expert Alumni

State tax filing

The solar tax credit is a non-refundable credit and any unused portion will be carried over to future years. The amount of $9,400 is the total tax credit. Whether you can use it all this year depends on your tax liability for the year before that credit. Your tax liability will only be known once your have completed your return. If your tax liability before the application of the credit is greater than the amount of the credit then the credit will be used entirely to reduce your tax liability. Otherwise, you will have an excess credit to be carried over.

The fact that you are receiving a refund means that your tax liability after application of the credit (whether in full or partially) is less than your tax withheld (and any estimated taxes paid).

Once you complete your return, you can print it before filing. You can then look at form 5695 line 16 - Credit carried forward to 2019. If line 16 = 0, then the credit has been fully used.

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