Hi Mike, thanks for the reply. I am concerned that the article you posted doesn't correspond to IRS language on Form 8911 (which I expect is mirrored on other nonrefundable credits). Specifically, the claim that a nonrefundable credit "can’t be used to increase your tax refund or to create a tax refund when you wouldn’t have already had one" is imprecise at best and wrong at worst. It muddies the distinction between total taxes owed and the additional payment or refund due at filing. A nonrefundable credit cannot reduce your tax liability BELOW ZERO. However, if your tax liability is positive but you are owed a refund due to over-withholding, a nonrefundable credit will increase the amount of the refund until your total tax liability reaches zero.
Here's a simplified example that is relatively close to my personal tax situation. Let's say I spent $1,000 on an EV charging station for personal use. Let's also say that my 2017 total tax liability before credits (Form 1040 line 44) is $20,000 and that I have another $5,000 credit for purchasing an electric vehicle (Form 1040 line 54c). Lastly, assume I withheld $18,000 during 2017, so I am owed a $3,000 refund before applying this credit.
On Form 8911 Part I, I would enter the $1,000 cost of the charging station. Part II would be essentially empty since the equipment is for personal use. In Part III, I would enter $300 (30% of $1,000) on lines 11 and 13, since $300 is below the $1,000 credit cap on line 12. Line 14 would be my $20,000 tax liability ("Regular tax before credits", NOT "tax after refund" or similar). Line 15b and c would be the $5,000 credit for my EV. Line 16 would be $15,000, the remaining tax liability after the EV credit. Assuming I don't fall under AMT, line 17 is zero and line 18 is $15,000. Line 19 would be the smaller of my remaining tax liability or the $300 credit, or $300. This would go to Form 1040 line 54 and would increase my refund by $300 to $3,300.
The amount of my refund appears nowhere in Form 8911. All that matters is my tax liability, which in this case is positive and substantially larger than all of my tax credits.
TurboTax clearly is not making this calculation correctly. I am not sure where the issue is, but many others are having the same problem since I am following at least half a dozen threads on this topic. This is particularly frustrating since Form 8911 is quite simple, and although this credit was renewed at the last minute, it is not materially different from prior years. I am forced to conclude that TurboTax simply hasn't bothered to find the problem and fix it yet despite multiple complaints.
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