Solar and EV tax credit application

[Insagn]

I purchased a solar system for my home in 2022 and used the tax credits on my 2022 and 2023 tax payments.  I am retired and normally do not have any taxes owed, but generate tax liability by doing Roth conversions on my traditional IRA in order to use the solar tax credits. I still have some solar credit remaining, but this year I purchased an EV and used the $7,500 tax credit at the time that I purchased the auto. My question is how will my solar credits be utilized, if at all in my 2024 tax return. I sent in estimated tax payment of $7,500 right after I purchased the auto. Will this amount be used to reimburse the $7,500 credit that I used when the auto was purchased, or will my solar tax credits be used first and the estimated taxes used for the balance (the remaining solar credit is less than $5,000) and the balance refunded to me?

[Opus 17]

I believe the EV credit comes off first (see the instructions for the limitation worksheet.)  https://www.irs.gov/instructions/i5695

If you don't owe tax after the EV credit, the unused solar credit will carry forward. 

[AmeliesUncle]

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@Insagn wrote:

I purchased an EV and used the $7,500 tax credit at the time that I purchased the auto.

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Are you saying you received the $7500 from the dealer?  If so, that credit should not affect your tax return at all (assuming your income is within the limits for the credit). 

[Insagn]

I did not receive any money from the dealer. I assigned my federal $7,500 tax credit to the dealer at the time of purchase which reduced to cost of the EV. My question is how will the application of the solar tax carryover and the EV tax credit apply to my 2024 tax liability. My tax liability is not enough to use both Solar and EV Tax credits. I would hope that since the solar credit can carry over to future tax liability it will apply after the EV credit since the EV credit is not allowed to be used over multiple tax years.

[AmeliesUncle · Accepted solution]

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@Insagn wrote:

I did not receive any money from the dealer. I assigned my federal $7,500 tax credit to the dealer at the time of purchase which reduced to cost of the EV.

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That essentially means you received it from the dealer.  As I said before, your EV should not affect your tax return at all (assuming your income is within the limits; you will need file the form for the credit but not receive any credit because the dealer received it).