Residential energy credits not calculating

[CEAW]

I qualify for this credit. I enter my info correctly and the software says there's no credit or carryover. I've tried every line on the residential energy property page and none of them work. If I put the cost on the residential clean energy page, I get a credit. So I've obviously answered the questions correctly. What gives. I'm using the online TT.

[DoninGA]

What exactly are you trying to enter?  Is it listed as a  Energy Efficient Home Improvement Credit?  Such as insulation, windows, doors, A/C unit, furnace. heat pump, etc.

If your tax liability is 0 (zero) the credit cannot be used.

Look at your tax return, Form 1040 Line 18.  What is amount on Line 18?

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.

[CEAW]

I know that I will not receive a credit this year. Shouldn't there be a carryover to next year?

[CEAW]

I should get a carryover per IRS. See below:

The credit is nonrefundable, so the credit amount you receive can't exceed the amount you owe in tax. You can carry forward any excess unused credit, though, and apply it to reduce the tax you owe in future years.Aug 28, 2023

Residential Clean Energy Credit | Internal Revenue Service

[DoninGA]

@CEAW It depends on what type of equipment was installed on whether or not you can get a carryforward of the credit.

If the following were installed there is no credit carryforward.

• $1,200 for insulation or air sealing material system.
• $250 for one exterior door and $500 for all exterior doors.
• $600 for windows.
• $600 for central air conditioners.
• $600 for natural gas, propane, or oil water heaters.
• $600 for natural gas, propane, or oil furnace or hot water boilers.
• $600 for improvements or replacements of panelboards, subpanelboards, branch circuits, or feeders.
• $150 for home energy audits.
• $2,000 for heat pumps and heat pump water heaters; biomass stoves and biomass boilers.

[MonikaK1]

The rules for carrying excess credit forward to 2024 vary by credit because of changes in the underlying tax laws. From this IRS FAQ page:

• 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.
   
• Under the Residential Clean Energy Property Credit: a taxpayer may carry forward the unused amount of the credit to reduce tax liability in future tax years.

Background:

Public Law 117-169, 136 Stat. 1818 (August 16, 2022), commonly known as the Inflation Reduction Act of 2022 (IRA), amended the credits for energy-efficient home improvements under § 25C of the Internal Revenue Code (Code) and residential energy property under § 25D of the Code. These FAQs provide details on the IRA’s changes to these tax credits, information on eligible expenditures, and provides examples of how the credit limitations work. 

General Overview of the Energy-Efficient Home Improvement Credit 

Through December 31, 2022, the energy-efficient home improvement credit is a $500 lifetime credit. As amended by the IRA, the energy-efficient home improvement credit is increased for years after 2022, with an annual credit of generally up to $1,200. Beginning January 1, 2023, the amount of the credit is equal to 30% of the sum of amounts paid by the taxpayer for certain qualified expenditures, including (1) qualified energy efficiency improvements installed during the year, (2) residential energy property expenditures during the year, and (3) home energy audits during the year. There are limits on the allowable annual credit and on the amount of credit for certain types of qualified expenditures (see Q 1 and 2 below). The credit is allowed for qualifying property placed in service on or after January 1, 2023, and before January 1, 2033.

General Overview of the Residential Clean Energy Property Credit 

The residential clean energy property credit is a 30-percent credit for certain qualified expenditures made by a taxpayer for residential energy efficient property. The IRA extended the residential clean energy property credit through 2034, modified the applicable credit percentage rates, and added battery storage technology as an eligible expenditure. The credit applies for property placed in service after December 31, 2021, and before January 1, 2033. The credit percentage rate phases down to 26 percent for property placed in service in 2033, 22 percent for property placed in service in 2034, and no credit is available for property placed in service after December 31, 2034.

@CEAW 

[jgpardee81]

Did you ever get an answer on this?  I'm having the same issue.  I have a tax liability this year and a $5400.00 carryover from last year, but when I enter it as a carryover, I'm not getting credit.  If I enter it as a improvement, it reduces my taxable income by $1700.00.  

[jgpardee81]

What about solar?  

[AnnetteB6]

If you had a Residential Clean Energy Credit for a solar installation on your 2022 return and all of the credit was not used, then the unused portion should be carried over to your 2023 return.  The amount should be shown on your 2022 Form 5695 line 16.   

If you double-check your 2022 return to verify that there is an amount available to carryover, but it is not being applied, consider providing a diagnostic version of your tax return so that we can take a closer look at what is happening with your return.  

The diagnostic file will not contain personally identifiable information, only numbers related to your tax forms.  If you would like to provide us with the diagnostic file, follow the instructions below and post the token number along with which version of TurboTax you are using and what state you a filing (if any) in a follow-up thread.

Use these steps if you are using TurboTax Online:

• Sign in to your account and be sure you are in your tax return.
• Select Tax Tools in the menu to the left.
• Select Tools.
• Select Share my file with agent.
• A pop-up message will appear, select OK to send the sanitized diagnostic copy to us.
• Post the token number here. 

If you are using a CD/downloaded version of TurboTax, use these steps:

• Select Online at the top of the screen.
• Select Send Tax File to Agent.
• Click OK.
• Post the token number here.

@jgpardee81 

[jgpardee81]

@AnnetteB6 

Thank you so much for your reply.  I did double check the carryover amount from last year's return and I correctly entered it on the form. 

The token # you requested is 1181162.  When I enter the number as a carryover, my tax liability doesn't change, but when I enter the same amount as a current year improvement, my tax liability decreases and my refund amount increases.  I also went in and double checked to make sure I actually owe taxes and I do...about $16k so I know it's not a tax due issue.  

I hope that makes sense.  

Again, token #1181162.

Thank you again for your help!

[AnnetteB6]

Thank you for providing your token number.  One more follow-up question -- please share which version of TurboTax you are using --  TurboTax Online or a CD/downloaded version?

@jgpardee81 

[jgpardee81]

@AnnetteB6 

I've always used the online version.  

Thanks,

Jade

[jgpardee81]

Hi @AnnetteB6 ,

Just following up to see if there was any update on this?

Thanks,

Jade

[AnnetteB6]

As of the last TurboTax update, most of the known issues with Form 5695 have been resolved.  There is still a calculation issue affecting only joint ownership of the home and claiming one specific credit that is scheduled to be corrected with the next update around March 8th.  If this applies to you, see this link and sign up for updates:  Why is TurboTax limiting my Home Energy Credit when I have a non-spouse occupant?

If you are still experiencing an issue, please respond with details so that someone may help you get it resolved.

@jgpardee81