I've searched around and am trying to get a little clarity on the solar panel credit. I have a client that made 21K on a w-2, she financed solar panels for 45K. We are applying for the residential energy credit and she is telling me that the company that installed the solar panels said she would get 11K back as a credit....I know this to be false. I have to try to explain it to her but I want to make sure that I have this right.
the solar panel credit is determined by her tax liability. Her total taxable income was around 2200. So the energy credit was only 226. She gets only that amount because her tax liability was very low.
Also, you has dependents and qualifies for EITC so she still has a refund coming to her.
My question is do I have this right?
This discussion has been locked. No new contributions can be made. You may start a new discussion here
Yes, you are correct. The solar credit is limited to the amount of income tax owed (Line 16 of Form 1040). The rest will be carried forward to next year.
Tell your client not to rely on a salesman for tax advice.
You have clicked a link to a site outside of the Intuit Accountants Community. By clicking "Continue", you will leave the community and be taken to that site instead.