No, for the federal Residential Energy Credit, there is not a $5,000 credit. The credit is 30% of your solar costs with no maximum amount. The Residential Energy Credit is a non-refundable credit, This means if on your 2023 tax return you only had a tax liability of $2,000 that is all you could claim. However this one can be carried forward to future tax years until this credit goes away which is currently set to happen in 2034.
To enter these credits into TurboTax take the following steps:
- Federal
- Deductions and Credits
- I'll Choose what I work on
- Home Energy Credits which is under the "Your Home" category
When you go to the Energy Efficient Home Improvement Section, you will be asked if you made any Energy Efficient improvements in 2024 or have a carryforward from 2023. Here you will answer yes. Continue through the questions answering NO, you did not make an improvement in 2024 if you did not. You will then be asked if you have a 2023 Home Energy Credit to Carryforward. Answer yes, then enter your credit you have available to carry forward.
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