Can I use the tax owed from an IRA withdrawl towards the Solar Panel credit?

[SweetieJean]

A lot of folks are caught by surprise by this.

[dmertz]

If you are receiving Social Security income of which 85% is not already taxed, the additional IRA income can also increase the amount of Social Security income that is taxable.

[SweetieJean]

Which state do you live in?

[pompcj]

Massachusetts

[pompcj]

I am thinking of trying to do the tax credit over 2 years.  We will pull from my IRA to convert to a Roth, I am 64

[SweetieJean]

You are lucky. MA also has a state energy tax credit.
<a rel="nofollow" target="_blank" href="http://www.mass.gov/dor/businesses/help-and-resources/legal-library/regulations/62-00-income-tax/830...>

[dmertz]

You might consider doing smaller Roth conversions over a number of years and carrying the credit forward to be applied in later years.

[pompcj]

Yes there credit is 1,000.  And yes I think I will spread it out over 2 if not 3 years.

[pompcj]

Thank you your help worked.  I got with my Accountant and withdrew enough funds from my IRA to generate enough Federal Tax.  I ended up putting most into a Roth account and the rest to pay for the solar panels.  I might of withdrew a little too much and will be owing Uncle Sam.

[hxse501]

I have a traditional IRA, not a ROTH.  I am considering installing solar panels in my home and need information on how to reduce my tax obligations.  I am 66 years old and retired while taking social security. Should I convert funds to a ROTH since the solar tax credit can be taken when I disburse funds from my retirement account? As you can see, I am somewhat confused. Sorry.