solar tax credits

[LDriggers]

My husband and I are both retired and rely mainly on Social Security for our income. IRS does not deduct taxes from our income, and at the end of each year, we have a $0.00 tax liability. We would like to take advantage the tax credits for EVs and solar installation in the recently passed Inflation Reduction Act. Are these tax credits refundable?

[OmM1]

Hello,

his is a nonrefundable tax credit, which means you will not get a tax refund for the amount of the tax credit that exceeds your tax liability. However, you can carry over any unused amount of Solar tax credits to the next 15 tax year.

Hope this helps,

[VincentL2]

This tax credit is nonrefundable and will only offset your tax liability for a given tax year.

[LDriggers]

Just to be clear, are you saying that I could carry over that tax credit up until 1938?

[OpeA1]

Hello LDriggers!

Here is what I found for you:

"This is a nonrefundable tax credit, which means you will not get a tax refund for the amount of the tax credit that exceeds your tax liability. 15 However, you can carry over any unused amount of tax credit to the next tax year." chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.energy.gov/sites/default/files/2021/... 

And another article from TurboTax :chrome-extension://efaidnbmnnnibpcajpcglclefindmkaj/https://www.energy.gov/sites/default/files/2021/... 

I hope this helps!

OpeA1.

[JandKit · Accepted solution]

Hi LDriggers,

Thank you for this question! 

The credits you mentioned are both non-refundable credits. This of course means that if you do not have a tax liability, you will not receive the credit. However the solar credit can be carried over to the next year. The Ev credit cannot.

[OmM1]

Solar Tax credits can be carried forward to 15 years, so if you generate the credit in 2023, you will be able to carry it forward to 2038.