What is your taxable income and what credits are you currently receiving? There are limitations of the credit. A nonrefundable credit essentially means that the credit can’t be used to increase your tax refund or to create a tax refund when you wouldn’t have already had one. In other words, your savings cannot exceed the amount of tax you owe.
- Scenario #1: I was able to create a scenario where my EV credit was $0. It was zero because TurboTax used the Earned Income Credit (EIC) refundable instead. The EIC brought my tax down to zero so there was no need to use any of the EV credit,
- Scenario #2: I was able to create a scenario where my EV credit was $1,000. I increased the income so I would not have any EIC and so my tax was reduced by $1,000.
- Scenario #3: I was able to recreate a scenario where I entered income of $400,000 and I still got the $1,000 credit to reduce my tax.
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