Hi, TurboTax is wrong for 2020 Residential Energy Efficient Property Credit. The software states that the credit is 30% of a homeowner's cost, but it should be 26% in 2020. Also, TurboTax tells me that this is a nonrefundable credit (i.e. no refund if greater than my tax liability), but it is actively calculating a HUGE federal refund, which is not right (I am a licensed CPA). Can TurboTax address these errors?
Yes, The residential energy credit (form 5695) allows you to deduct 26% (30% in 2019) of the cost of installing solar energy system from your federal taxes. It is non-refundable and is used to lower your tax liability, If zero tax, credit will be carryforward to the next year/s.
The form may not be updated in Turbo Tax yet or not finalized by the IRS.
Thanks, but TT is calculating the credit as a refundable credit - it is adding over $8,000 to my refund which is wrong. Will there be a fix or do I have to manually update this? Others might trust this and then make an unknown error to their returns.
Yes, I agree and I really don't know how this can happen. This is difficult to try to diagnose on this level since we are unable to view your tax return. My suggestion is to contact Tax Support at 1-800-446-8848 as they have the ability to look at your screen or order a diagnostic copy of your return to troubleshoot the issue.
Unfortunately, I cannot contact a human being at TurboTax. I still do not have an answer for TT calculating the solar tax credit as refundable when it clearly should not be. I have 0 liability this year and it's not calculating it as a carry forward - it is increasing my refund exponentially.
You are correct. If you do not have a liability, the credit should be carried forward and not refunded to you.
Residential energy credit for solar panels
I recommend updating your software to ensure it's up to date. This would update your program and correct whatever is not calculating correctly.
You can do this by selecting the Online menu at the top.
Then select Check for Updates.
If that does not rectify the issue, try using the link below to contact us instead.
Please comment if you are still having issues and we will do our best to assist you.