solar Tax credit

[manishjoshi]

Hi there,

  I am planning to get solar panels on my roof and I have heard that based on the total price of the process I can get a solar energy tax credit.  So does that mean I get the credit only if I own money at the end of the year to the federal govt? If I do not own any money or I get a refund back I won't be getting anything from the credit? Is my understanding correct?

Thanks

[LoriC17]

Hello,

The Residential Clean Energy Credit covers the the costs of new, qualified clean energy property.  This credit is non refundable, so it will be applied to the taxes you owe. If you have no tax liability (refund) then it will carry forward to be used in future years. The credit is 30% of cost including installation. Some states also offer credits and other rebates. Here is a good link for federal energy credits.

https://www.irs.gov/credits-deductions/residential-clean-energy-credit#limits

[AR_CPA2]

Hello Manish,

In 2023, you may claim a credit of 30% of the amount you spend on the installation of Solar Panels on your residence located in the U.S.  This credit reduces your tax liability and the left over credit can be carried forward to a future year.  For more info:

https://www.energy.gov/eere/solar/homeowners-guide-federal-tax-credit-solar-photovoltaics#:~:text=Ge....

I hope it helps, please let us know if you have any additional questions.

Enjoy your day!!

[John-H2021]

Hello Manish,

The Solar credit is applied to your tax liability and having a refund or owing money at the end of the year doesn't affect the credit.  The credit is applied to your tax liability (amount of tax due on your taxable income) and will either increase your refund or decrease your balance due. The credit is nonrefundable so if the credit is more then your tax liability the excess will be carried over to the following year.

Here is a link to an article with more information

https://turbotax.intuit.com/tax-tips/going-green/what-are-energy-tax-credits/L4KbTmTZS