Federal Solar Tax Credit

Forum|Forum|4 years ago
January 26, 2022
3 replies
9 views

How does this work? I purchased solar this year and am able to claim the tax credit of 26%. Do I plug it into turbotax and it will sort itself out? Do I need additional help to make sure I get the full credit?

Critter-3

Level 15

To claim the solar credit, please follow these steps:

In TurboTax, open your tax return
Click on Federal in the left-hand column, then on Deductions & Credits on top of the screen
Scroll down to All Tax breaks, locate the section Your Home and click on Show more
Click Start next to Home Energy Credits (see screenshot)
Follow the interview to enter your information.

amabergelAuthor

Level 2

Can you claim it all in one year? If I have tax obligations less than the credit, will it show up as a refund?

JohnW152

Level 15

You can use the credit only to the extent that it offsets your tax owed. Whatever doesn’t offset tax will not be added to your refund.

But, by law, if you can't use all of your Residential Energy Credits in one year because you've already offset some or all of your tax liability for that year, the unused portion has to be carried forward to the next tax year.

To see the prioritization of credits – that is, the credits that would be applied to tax before the Form 5695 credit – please see the Residential Energy Efficient Property Credit Limit Worksheet—Line 14 in the Instructions for Form 5695.