Deductions & credits

I am pretty sure that this has been resolved by now, but after reading this over carefully I think there is some confusion regarding the definition of "tax liability".  Tax liability is your total tax, not the tax you still owe.  I think that  you are thinking that your "tax liability" is what you still owe, which is not the case.  For example, if you paid $20k in taxes throughout the year (withholding, estimated taxes, etc.), and your Tax Liability (your total tax) for the year was $21,500, you would owe Uncle Sam $1,500.  In this case the Tax Liability is $21,500, not $1,500.  If then entered a Solar Tax Credit of $8,000, you would get a $6,500 refund ($8,000 Credit - $1,500 still owed).