Is my child tax credit limited by residential energy credit? Or the other way around? Which is primary? I usually get $4000 for my 4 kids and have $6534 energy credit.

[dcchapman7]

I'm hoping I can go ahead and take my $4,000 child tax credit again this year and then just use a portion of the residential energy credit and carry over the remainder for next year.

[Hal_Al]

Child tax credit is not on the tax credit ordering list (http://www.mytaxhouse.com/?p=1354 ). Per Publication 972, tax is first reduced by other credits, all of which are figured using a tentative child tax credit which is computed on Worksheet 1 in Pub. 972. Then, the remaining tax is reduced by the child tax credit. 

The child tax credit not claimed on Form 1040, line 51 is then allowed as an Additional Child Tax Credit (calculated on Form 8812) on line 67. 

[TaxGuyBill]

If you have enough "Earned Income" (from a W-2 job or self employment), the simplified answer is that the Energy Credit will be applied first, and the Child Tax Credit will be refundable.  In other words, you will probably get them both this year.

[dcchapman7]

This is a bit of a bummer, I am estimating my tax at around $6000 based on my income and looking at last year's tax table.  This means my residential energy credit of $6534 will cover everything and I won't need to use my child tax credit (which would be $4000) and actually ends up devaluing the residential energy credit that I was hoping I could spread over 3 years... Am I understanding correctly?  Other responses here indicate the opposite though and seem like the one from TurboTax Phillip below, any further thoughts?

[TaxGuyBill]

For my comments, I am going to assume most of your income is from "Earned" income.  Based on those numbers, you can use $6000 of the Solar Credit *AND* you will receive $4000 of REFUNDABLE Child Tax Credit.  The other $534 of Solar Credit will be carried to next year.

[dcchapman7]

That would be great, thanks for the feedback

[Phillip1]

Refer to Hal_Al's answer above.

[dcchapman7]

Any comment about other reply from the above user?  "Child tax credit is not on the tax credit ordering list (<a rel="nofollow" target="_blank" href="http://www.mytaxhouse.com/?p=1354">http://www.mytaxhouse.com/?p=1354</a> ). Per Publication 972, tax is first reduced by other credits, all of which are figured using a tentative child tax credit which is computed on Worksheet 1 in Pub. 972. Then, the remaining tax is reduced by the child tax credit.

The child tax credit not claimed on Form 1040, line 51 is then allowed as an Additional Child Tax Credit (calculated on Form 8812) on line 67."

[Phillip1]

Looking it over, Hal_Al is right. Refer to his answer above.

[Critter]

Because the energy credit can be carried forward the CTC is used up first then the energy credit... but make sure you use the credit up before you lose it.  Increasing your income in some way like a ROTH conversion is a good way to use the credit up.  Next year the CTC increases to $2000 per child so income management will be the key.