2025 Solar Incentive

[ChapmanM]

Greetings All,

Have been perusing the community for an answer but haven't ran into one that addresses my question. Live in Oregon and installed solar in August 2025. I filed my taxes via TT, went through the questions and entered info for the solar costs. But instead of creating a credit it showed a refund due to me of the amount remaining of the credit after deducting taxes owed. Went back through the form (checking with info on the forum and IRS), everything seemed correct, wasn't asked if I wanted to carry forward the credit (although I was asked if I had a 2024 carry forward).  Went ahead a filed figuring it would just end of as a credit when I ran TT in 2026 for this year. Received a Tax refund in the account today for the remaining credit. Any ideas why? My understanding is it is not an actual refund but a credit.

[PatriciaV]

The energy credit calculated on Form 5695 is reported on Schedule 3 (Form 1040) Line 5(b). Part I of Schedule 3 reports Nonrefundable Credits, the total of which flows to Form 1040 Line 20 to reduce the tax liability on Line 24, which cannot be less than zero. If you are seeing a refund Form 1040 Line 35(a), this is from tax withheld or other taxes paid.