Renewable Energy Tax Credit

[ENVSS]

Why is the TT program not giving me my full credit for a solar project.  The rule indicates that the full credit will be applied up to the full amount of tax owed and if greater will be carried over to the following year.  My current tax owed is $22k yet the program is giving a credit of $8,960 and carrying over $6,800 to next year.   it should be giving the full credit!

[AnnetteB6 · Accepted solution]

The residential energy credit is not applied to the full amount of tax owed, it is applied to the full amount of income tax owed.

If part of your tax liability comes from self-employment tax, the energy credit will not reduce that tax amount.  

Since part of your credit is being carried forward to your 2022 tax return, you are getting the full credit.  You just cannot claim it all in the same year.  

[ENVSS]

Thanks for making the clarification.  It was important to understand for our tax planning.