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Returning Member
posted Jan 19, 2025 5:34:14 AM

Solar Credit not calculating correctly

I have installed a Solar and battery system on my main home in 2024. Prior to entering the cost of the system I owed taxes. Turbo tax has reduced the amount that I owe but not to zero and it wants to carry forward the energy credit to next year. Shouldn't it reduce my tax liability to zero and then carry forward the remaining amount?

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2 Replies
Level 15
Jan 19, 2025 7:17:05 AM

maybe not to zero.....depends on the source of your income.

 

i.e., if you have Self-Employment income, the SE taxes (Medicare and SS) cannot be reduced by the credit.

If you look at your actual form 1040, you will see that the Energy Credit is applied (line 20) and subtracted BEFORE the SE tax is added in.  The amount showing in line 20  will not exceed line 18   (if Child tax credits in line 19 is empty).

Returning Member
Jan 19, 2025 7:28:35 AM

Ok thanks it makes sense now, all of my income is self employment. I held back money on my estimated payments because of the solar install but it sounds like I held back too much.