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There are two categories of tax credits: Refundable, and Non-Refundable. Residential Energy Tax Credits for 2011 are considered to be Non-Refundable tax credits under the IRS regulations, just as the previous tax credits were.
A non-refundable credit is a tax credit that can reduce your tax liability to zero (0), but not below.
ok. Does that mean in the example that I presented. That come tax time .. if i fill in my numbers, i would get a refund for $9000, and I would not have to pay the $1000 i owe, and the rest of the $5000 credit will applicable to the 2012 taxes?
Robin, what you wrote I had already got that from web searches, what i need answered is the question with my specific example of what refund if any will i get back? I apprecaite your help
Robin, I will away form the computer for 5 mins - it is 3:24 ET. I will be right back.
sorry, i am back
No that means that the credit will only be used on your 2011 return to lower your liability by the credit amount (zero if credit is same or more than liability). YOu do not get to carry it forward and any amount of credit not needed to lower your laibility will be lost.
This is a really easy to follow expalination of the creditshttp://www.us-ac.com/LuxaireRes2011FedTaxCreditUpdatedFAQ2011-06-27.pdf
Oh, so, for 2011 -- in my example - i will get back $9000 + $1000 i owe. And the rest of $5000 will be lost and cannot be carried over to 2012
On a personal note, I applaud you for your forward thinking. I have only thus far been able to switch to solar on sailboat and RV but when I move I plan on doing more with solar and wind.
thanks. But if i install solar say in 2012, can i get the credit then?
and the geothermal in 2011.
if the geothermal is already installed
Yes, you can use the credit for new solar. It is not a one time thing. The installation will determine what year to claim
for your help
The goe in 2011 and then if you install solar in 2012 the costs should be on your 2012 return
You are welcome
you see, my geo is already installed and my solor is scheduled to be installed this week.
there is no way to carry forward the credits?
because the cost of them togehter would be about $140K
No, the date of installation determines the year.
It would have been a great year to pull money out of a taxable account
thanks anyway for your help. I will hit accept now
I read through IRS form 5695 which is for the credit. On page 5 of the referred PDF, on instruction for line 28, it says that "If you cannot use all of the credit because of the tax liability limit (line 26 is less than line 23), you can carry the unused portion of the credit to 2011". This I guess is the form for 2010. Has it changed in 2011?
thanks for your help
I am so red faced. You can carry forward till 2016 the credits fro the geothermal. Please forgive me. I was stuck in thinking on the first years back when the doors and insulation and windows were introduced. There was and is no carry forward on those items and they too are nonrefundable. Although the provisions for the geothermal and solar are nonrefundable you will be allowed to carry forward the over amount till 2016 (unless the credit changes). No forms for 2011 are ready yet but I have found no attempts to change or reduce the geo and solar credits at this point.
I do apologize. I too was still looking into the changes when I just got your message.
You see, i needed to make sure that i am not losing any money as i need to plan out my 2012. Thank you for your help.
The system is asking me to accecpt the answer and make a payment. Do I have to make a payment for the same question?