2021 Wood Stove Tax Credit 26%

[Locquatious]

In 2021 there is a tax credit for the purchase and installation of an EPA approved wood stove. The current version of TurboTax 2021 Home and Business only allows a 10% credit. Or am I looking in the wrong place?

[Critter-3]

The current BETA version of the 2021 program is NOT fully functional with all the 2021 tax laws and will not be until sometime in January or even Feb/March depending on the section.  

[DoninGA]

Got to this Energy Star website for information and note that the tax forms for this credit will not be available until January 2022 - https://www.energystar.gov/about/federal_tax_credits/biomass_stoves

[Locquatious]

Well that does not help tax planning. One needs to know how the tax credit is applied in order to maximize taxable offsets. 

The credit legislation has been in effect all year, and never at risk of being rescinded. It would seem there is enough warning that the credit already be part of TurboTax 2021.

TurboTax would be enhanced if it were updated more quickly to help users do better tax planning. Programs that excel in that capability would have a competitive advantage.

[Critter-3]

Ok ... let me explain how  the system for new items works ... although the DRAFTS of the forms/instructions are released earlier and the programmers can try to work in the new items until the IRS issues final forms and approves the changes into the program the new items cannot be made available.  Sadly it just takes time.

1) IRS completes and issues form specs and instructions

2) programmers of income tax programs integrate the new forms and tests system

3) IRS approves the programming

4) new forms released in the program 

[Locquatious]

Just suggesting that TurboTax provide the customer with the ability to estimate taxes in situations like this. It could be a stand-alone item. For example:

Estimated credit Worksheet

• Cost of Credit related Item      5000       
• Estimated credit percentage       26.0              
• Estimated credit value   1300   
• Temporarily apply this credit to your tax calculations?           Yes  

This estimated credit is for tax planning purposes only. When the official forms become available for this credit, make sure you apply the proper credit to those forms and remove this estimated credit. These actions will be applied to the final checklist when you actually begin completion of your taxes.

[Opus 17]

---

@Locquatious wrote:

Just suggesting that TurboTax provide the customer with the ability to estimate taxes in situations like this. It could be a stand-alone item. For example:

Estimated credit Worksheet

• Cost of Credit related Item      5000       
• Estimated credit percentage       26.0              
• Estimated credit value   1300   
• Temporarily apply this credit to your tax calculations?           Yes  

This estimated credit is for tax planning purposes only. When the official forms become available for this credit, make sure you apply the proper credit to those forms and remove this estimated credit. These actions will be applied to the final checklist when you actually begin completion of your taxes.

---

Form the point of view of how Turbotax is programmed, the developers would have to create a mockup version of the proper form (probably a revision of form 5695).  The program just isn't set up for estimates to be attached randomly.  This is not out of the question, but then if the final form turns out to be different than their guess, lots of people might be upset if the calculation changes.

You're welcome to investigate other tax programs to see if they include unfinished draft forms when calculations change.  After 20+ years, I can tell you that Turbotax is very unlikely to change they way they have chosen to handle changed forms and instructions. 

[Critter-3]

Agreed that TT will not be changing their system since it works.   What you think is just a simple worksheet calculation  is really much more involved ... a non refundable credit is influenced by other refundable, non refundable and partially refundable credits thus one simple worksheet will not really work at least for this situation.  

[Locquatious]

I'm beginning to understand the corporate culture. Not interested in new attractive features for customers, after all, sounds like work, and...

"If it ain't broke don't fix it," said the man by the side of road, hood up, head under, muttering and cussing; kids crying and holding their crotches; wife trooping back down to where she saw the last service station.

I get it.

[FrankJWil]

When talking to support to understand how I would enter the qualifying stove on Turbo Tax, they were under the impression that this credit would only reduce the amount of taxes if you owed, not increase your rebate. Is that not correct?

[Vanessa A]

That is correct.  The wood stove credit is a nonrefundable credit.  That means it can only bring your tax liability down to zero, it cannot take it to a negative amount.  So, if your tax liability is already $0, you will not see a change in your refund.