Why is my solar tax credit not taking my tax to zero?

[york_knowlton]

We purchased a $12,000 solar system for our home. Our federal tax liability before I enter this deduction is $764. When I enter this deduction our tax liability is reduced -$690 and becomes $74, with a $2,910 credit to carry forward.   Why is the tax due not reduced to zero?

[SteamTrain · Accepted solution]

Open your form 1040 in Forms Mode.

Look at lines 57-to-67.  Those taxes are assessed no matter what your tax is on line 56.

For example, people with some Self-employment income...greater than $400, still have to pay SS&Medicare taxes. A 10% penalty for an early withdraw from a retirement fund, still have to pay that penalty.  But there are 10 lines of other stuff, as noted above.

[york_knowlton]

Thanks! I am self employed and now realize where the tax liability was.