Do I qualify for the Federal Tax Credit?

[bcroe]

I believe the important thing is, the total amount of tax that must be paid that year
can be reduced by the amount of 30% of the solar investment that year. But the
reduction cannot exceed the amount of tax that year. If there is excess it can be
carried over against a later year's taxes, provided the credit is still allowed that year.
The issue of paying or refund works the same. Bruce Roe

[gregvet]

but you're saying you actually get it back? That makes it a lot simpler for people vs having your withholding adjusted and messing with all that.

Yes, if you had withholding tax taken from your pay, you will get a refund up to the 30% calculated PV cost credit. Depending on what your calculated withholding tax was you will get /none/some/all of it back. If you had no calculated withholding tax at the end of the tax year(very unlikely), you cannot get a refund but you can carry the credit forward and hopefully you will get it back before the carry-forward tax credit expires.

[HX_Guy]

Whether you owe or do not owe taxes, if you have had withholding tax taken from your pay, then you will get a refund/credit against that tax that was withheld to the extent that you satisfy the qualifications for getting the 30% tax credit. On my first year after PV installation, I had enough withholding tax from my pay that I received all of it back. Excess credits can be taken in the following year(s). I am not a tax accountant but I stayed in a Holiday Inn.....Check with your tax adviser oops.. looks like Hx Guy beat me to the reply.

Hmm actually your answer is better because I didn't realize you can leave your withholding alone and get a refund. I thought you only got the tax credit if you owed taxes at the end of the year...I figured if you owed $0 or were getting a refund, then you would lose out on the 30% solar credit but you're saying you actually get it back? That makes it a lot simpler for people vs having your withholding adjusted and messing with all that.

[gregvet]

Whether you owe or do not owe taxes, if you have had withholding tax taken from your pay, then you will get a refund/credit against that tax that was withheld to the extent that you satisfy the qualifications for getting the 30% tax credit. On my first year after PV installation, I had enough withholding tax from my pay that I received all of it back. Excess credits can be taken in the following year(s). I am not a tax accountant but I stayed in a Holiday Inn.....Check with your tax adviser oops.. looks like Hx Guy beat me to the reply.

[HX_Guy]

Do you have a regular job where you get a W2 or are you self employed?

One thing you have to realize about getting a refund is that means you paid too much in taxes throughout the year, and you're just getting that difference back.

The way it works with the 30% tax credit is that you would adjust your withholding on your paychecks so that you don't pay any taxes, or very little, throughout the year and then when it's time to do your taxes...it'll show you owe X amount but that will then be zero'd out or offset by the 30% tax credit.
At least that's how I understand it to work for W2 employees.

I'm self-employed/business owner so I normally have to send in quarterly tax payments but with the solar, I can just not send those in and then when I do the taxes, same scenario as above, the amount due is offset by the solar tax credit.

[steeve725]

Hi, Everyone

Before I decide on Solar or not, I need to know peoples input on the Federal Tax Credit of 30% for going solar.

According to what I have read on the internet and me being NO tax consultant or CPA the credit only applies to people that OWE taxes.

I have never owed and always get a refund.

Has anyone been in my position were they get a refund and went solar?

How did the 30% federal tax credit work for you?

The way these Solar sales people write it up, they put your total amount for the system, then deduct the 30% federal tax credit, then local utility rebates, then they tell you your put of pocket price you will pay for the system.

Its (30% fed tax credit) confusing to me, because if I don't get it then my out of pocket will be much higher.

Thank You for any input

Steve