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When Does Child Tax Credit Disappear?

This is it.  Only one more year until your dependent is 18 and can legally move out on their own.  You've been counting down these moments since they turned 14 and started clearing out your fridge on a weekly basis.  But just as any teenager does, they are going to hit you with one last gut punch before they ride off into their own lives.  The Child Tax Credit (CTC) was formally introduced to the tax code in 1998.  It has evolved into one of the most lucrative reasons to have a child this day and age (some might say the only reason).  Starting in 2018 the CTC jumped up to $2,000 and is claimable to all parents, caregivers, and guardians as long as they are providing half the support and meet other tests to qualify.  But while your child may forever be 8 years old in your eyes, the IRS sees them much differently. In the eyes of the IRS they reach adulthood at the age of 17 and the formally amazing tax return you used to have, just jumped off a ...
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How much of a tax credit will I get for Solar Panels?

Congratulations on buying your solar panels! Now it's time to determine if your sales person was totally full of $%*# or only partially full. 

The solar tax credit depends on one major item: Income Tax.  To get a better gauge of your Solar Credit, pull out your 2017 form 1040, flip to Page 2, and look at Line 47.   If there is an amount here, chances are you will qualify for SOMETHING.

While Solar Panels vary in price, we will assume for this example that the purchase price for a qualifying system was $20,000 and the Federal Credit remains at 30% of purchase price.


In this situation, the refund will be whatever withholdings the taxpayer and spouse have. If you have children under 17, the refundable child tax credit will also be refunded along with any other refundable credits you may have.


 BUT WHAT IF I DON'T HAVE ANY INCOME TAX ON LINE 47?????

You just got hosed by the solar dealer.  The solar credit is non-refundable, meaning if there is no tax, there is no credit.  This happens when taxable income is low (Social Security, Capital Gains), families with many dependents, high itemized deductions, etc.


It's possible you will get to use the tax in the future as the credits carry for 5 years but for the current year you will not receive any tax credits.

Quick Takeaway: If you aren't sure you will reap the benefits of the solar tax credit, review your previous returns and/or call your tax preparer. 





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