TomD8
Level 15

Deductions & credits

To explain it another way:

 

The solar tax credit is not a refund.

It is a credit against your federal income taxes due.

If you have a solar credit of $7,000 and your federal taxes due are $10,000, the credit would reduce your tax bill to $3,000.

If you have a solar credit of $7,000 and your federal taxes due are $5,000, the credit would reduce your tax bill to zero, and you'd have $2,000 of unused credit to use on your return the following year.  You would not get a refund of the unused credit.

**Answers are correct to the best of my ability but do not constitute tax or legal advice.