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posted Feb 26, 2023 10:00:09 AM

I paid about $12,000 last year for new energy-efficient windows. TurboTax says I get a tax credit of $2. Shouldn't I get the maximum credit of $500? What's going on?

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1 Replies
Expert Alumni
Feb 26, 2023 11:36:06 AM

Energy tax credits aren’t refundable tax credits. This means that you can reduce your total tax to zero if you have a large enough credit. But, you 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. 

 

Under the Energy Efficient Home Improvement Credit: a taxpayer may not carry the credit forward. Thus, if a taxpayer does not have sufficient tax liability to claim all or a portion of the credit in the year in which the related property for which the qualifying expenditure is placed in service, the unused amount of the credit may never be claimed.  

 

Please see this from the IRS for more information.