Deductions & credits

Is this a solar credit? Are you seeing this credit on form 5695 or where are you seeing the credit amount? If this is a solar credit, you can carry forward the remaining balance that you are unable to use this year.  So your credit would not be limited for the amount of credit you would receive in total, just the amount you can take of it this year. 

If you look at your 1040 form, you should see on line 16 your starting tax. Is this where you see $1,000? Then you will see other credits you may be eligible for that will reduce your tax.  Then on line 20, you will see an amount from Schedule 3 that is a sum of all several nonrefundable credits including the Home Energy Credits. If your amount on line 16 is only $1,000, then the amount on line 20 (if no other credits) would be $1,000. If you do not have an amount on line 23, then you should see the amount on line 24 reduce to $0 (if you have a 20k credit) Then you will see on line 25 your withholdings.  If like 24 is $0, then you would get all of your withholdings back.  

You will then have a carryforward on form 5695 of $19k. 

This is a nonrefundable credit, and does seem to be working properly.  If this is not similar to what you are seeing, please provide more detail such as what numbers are on lines 16 through 35 on your 1040.

On the menu bar on the left that shows. 

1. Select Tax Tools
2. On the drop-down select Tools
3. On the pop-up menu
4. Select View Tax Summary
5. On the left sidebar, select Preview my 1040

If you are using the desktop version, you will just need to click on forms mode.