Home Energy Credit

[Wahoojedi]

So I bought an a/c in 2023. Total cost installed was 7,160. I’m taking the standard deduction for filing jointly married at 27,700. My question is before I put the home energy credit in of 2000.00 I owe taxes of 127.00 and when the credit is applied it has been getting back around 1800.00 as a refund. Is this accurate as I thought it was just a credit or something of that nature if you owed excess in taxes or you could carry it over. I didn’t expect a refund.

[MayaD]

You are right, Energy tax credit is a non refundable credit. This means that it can reduce your tax liability to zero but, can’t get any excess credit amount as a payment to you on your tax return if you have more energy credit than your total tax.

Your federal tax liability amount is found on Form 1040 (line 24) and it is different than amount that you owe. 

If total of your tax withholdings and payments is less than your tax liability, the unpaid difference is the tax you owe.