Solar Energy Credit Form 5695

[MHALSMER]

Client purchased solar panels in 2022 in the amount of $78,819 and I've filled out the form 5695 and it appears to be flowing to schedule 3 and it flows to the 1040 but it is not being deducted from the tax liability.

All forms and software are up to date.  If I replace the amount of $78,819 with $0, nothing changes.  The client still owes the same amount.  It appears as though they are not receiving this credit.  They owe the IRS $2,500 and this credit of $3,593 is not being applied anywhere that I can see.

Does anyone have any idea why this might be happening?  They have a Schedule C in the return as well as W2s.  Would that be causing this?  Does the solar energy credit not apply to Self Employment income?  

[Just-Lisa-Now-]

Follow the money on the 1040, it would only reduce income tax, not other types of taxes, like self employment tax.

[BobKamman]

Purchased in 2022?  This is a 2023 return?

[TaxGuyBill]

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@MHALSMER wrote:

this credit of $3,593

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Is that the number on line 14 and line 15 of Form 5695?

Have you gone through the error check/review to clear any errors?