I entered a Qualified Plug-in Electric Drive vehicle and when I was finished, it added to full amount as a refund. Does anyone have any insight to this?

[Anita01 · Accepted solution]

It's a nonrefundable credit so it isn't paid to you in cash but it does decrease the tax owe and adds to your refund by reducing that tax.

[pwculp]

So that means the TurboTax is calculating it incorrectly, how can this be fixed?

[Anita01]

What is incorrect about that?  I'm saying the credit doesn't simply add to your refund, it reduces tax you owe and if you have enough tax to absorb it, the reduction in tax owed can increase your refund by the credit amount.  Since your refund is cash, you end up with the credit amount as part of your cash refund.

[pwculp]

TurboTax software added the whole amount as a refund, I already had a refund calculated and it added to it.  That's what I am saying is wrong.

[pwculp]

It took me a while, but after reviewing the federal tax amount I was still paying, this makes sense.  Thank you!!