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Solar Credit Carry forward

I am looking to purchase a solar system for our house.  I know that there is 30% non-refundable tax credit available for solar.  My question is HOW MANY years can I carry forward the unused portion of the credit if my tax liability is not high enough to utilize it all in the first year.

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Solar Credit Carry forward

As you have probably read, this is an area that the IRS has not yet ruled on.

If you spent $3,000 in 2016 on solar panels, but your tax liability was only $2,000, then you could take only the $2,000 for 2016, and carry over the $1,000 to 2017.

But that is all the instructions for form 5695 (2016) say.

I see an industry report that the IRS has extended the credit to 2021, which raises the hope that carryovers may run to 2021, but I cannot find an IRC reference yet.

See the IRS Q&A for more background.

If the industry report is true that the credit has been extended to 2021, then the carryovers are likely extended as well.

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4 Replies

Solar Credit Carry forward

As you have probably read, this is an area that the IRS has not yet ruled on.

If you spent $3,000 in 2016 on solar panels, but your tax liability was only $2,000, then you could take only the $2,000 for 2016, and carry over the $1,000 to 2017.

But that is all the instructions for form 5695 (2016) say.

I see an industry report that the IRS has extended the credit to 2021, which raises the hope that carryovers may run to 2021, but I cannot find an IRC reference yet.

See the IRS Q&A for more background.

If the industry report is true that the credit has been extended to 2021, then the carryovers are likely extended as well.

Solar Credit Carry forward

What if I spent enough on solar panels that I was eligible for a tax credit of $4000.  However, I only had a tax liability of $1000 in each of the next four years.  Could I continue to carry forward that credit for the next four years?

Solar Credit Carry forward

If Congress continues to enable the credit (as noted in the industry report that I referred to above), then the answer is likely "yes".

Solar Credit Carry forward

I am well am wondering if anyone yet has an answer to HOW MANY YEARS can I continue to roll my solar credit forward.  Please lmk if anyone has figured this out.  This is my 2nd year rolling some over, wondering if anyone knows if this will continue in the next year or two?

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