Solar, EV, and EV Charger Tax Credits

[kellyandkris216]

Hello,

We decided to installed solar this year, which then enabled us to buy an EV, which then needed an EV charger installed.  All of these things have tax credits associated with them, but I'm trying to figure out how to get some of it carried over in turbotax instead of losing it. 

From what I see, our total tax liability is ~$12k for 2021. The EV tax credit is $7500, the EVSE credit on our station is ~$1000, and our solar credit is ~$8800. Of course, all of this adds up to >$12k, so I'm trying to figure out how to get the EV and EVSE credits to apply first, followed by the solar credit since I understand the solar credit can carry over to next year (whereas the other credits can't). Is there a way to do this, or is the excess ~$5300 in tax credits lost? Thanks!!

[JohnW152 · Accepted solution]

No, there's not.

The IRS has a specific order in which credits are to be applied to offset tax.

As far as the credits you’re inquiring about, they’re applied to tax in this order:

1. Qualified Plug-in Electric Drive Motor Vehicle Credit, Personal use part, Form 8936, Part III

2. Residential Energy Credits, Form 5695, Part I, then

3. Alternative Fuel Vehicle Refueling Property Credit, Form 8911.

So, after your Form 8936 credit is applied to tax, any amount of tax remaining will be offset by your Residential Energy Credit.  If your taxes are completely offset at this point, the remaining Residential Energy Credit will carry over.

Your Form 8911 would be applied last, if there’s any tax left to offset.

See the Instructions for Form 8936, Instructions for Form 8911, and Instructions for Form 5695 for more information. 

[kellyandkris216]

Thank you!