My home energy credit appears to be calculating as a deduction in the system instead of a credit - is anyone else running into this issue?

[iridiumbear]

I went through the Home Energy Credits section in Tax Breaks and entered the expense (~$36k) and my expected federal refund went up by ~$200 instead of the $10k+. Having read quite a bit of tax code this appears to be incorrectly calculating.

[DoninGA]

The credit can only reduce your tax liability to Zero.  Any remaining credit is carried over to the next tax year.

Look at your Form 1040 Lines 16 thru 24.  Is your Total Tax on Line 24 $0

You can view your Form 1040 plus Schedules 1, 2 and 3 at any time using the online editions. Click on Tax Tools on the left side of the online program screen. Click on Tools. Click on View Tax Summary. Click on Preview my 1040 on the left side of the screen.

[iridiumbear]

Thanks DoninGA. My tax liability is still significant and nowhere near zero, so I don't think this is the issue.

[DoninGA]

You would only receive a 30% tax credit if you installed items eligible for the Residential Energy Credit -

1. Qualified solar electric property costs
2. Qualified solar water heating property costs
3. Qualified small wind energy property costs
4. Qualified geothermal heat pump property costs
5. Qualified battery storage technology costs
6. Qualified fuel cell property costs

Or did you have Qualified Energy Efficiency Improvements installed - 

For the energy efficient home improvement credit, the lifetime limitation has been replaced by an annual credit limit. A 30% credit, up to a maximum of $1,200, may be allowed for:
• Insulation material or air sealing material or systems;
• Exterior doors;
• Windows and skylights;
• Central air conditioners;
• Natural gas, propane or oil water heaters;
• Natural gas, propane or oil furnaces or hot water boilers;
• Improvements or replacement of panelboards, subpanelboards, branch circuits or feeders; and
• Home energy audits.

Look at Schedule3 Line 5a and 5b.  This amount flows to Form 1040 Line 20

[iridiumbear]

Thanks DoninGA. The ~$36k is qualified solar electric property costs. I think it's a glitch that is hopefully caught and fixed, otherwise I will not be able to use TurboTax to file (which would be a first). Does anyone know if there's tech support outside of this community forum?

[DoninGA]

@iridiumbear I just completed a Form 5695 for the Home Energy Credit.  Entered $35,000 for the cost of installing a solar electric system on the home.  The 30% credit of $10,500 was calculated on the Form 5695 and entered on Line 15 of the 5695.  This amount flowed to the Schedule 3 Line 5a.  The total of Schedule 3 Part 1 Line 8 flowed to the Form 1040 Line 20 which shows the $10,500 credit.

[AmeliesUncle]

---

@iridiumbear wrote:

My tax liability is still significant and nowhere near zero, 

---

Just to clarify, it is your INCOME tax liability.  Other taxes, including self-employment tax, can not be offset by the credit.

[iridiumbear]

Yes, understood. My tax liability is only income tax. Thank you.

[iridiumbear]

Thanks Donin. I guess it's a me problem. I'll revisit when I have the rest of the documents required to actually finalize my taxes if this issue isn't impacting others, and will submit a different way if TurboTax is still not applying it appropriately at that time.

[DD660]

I have a thought, similar to some of the comments.   I have $6600 in solar battery expenses and TT wants to carry it over to 2025.  The deduction would be $1984.  I haven't completed some areas of my taxes as I don't have docs yet from my investment bank which brings in some tax load. So, I assume TT will change it once it sees all of the info.