So we are looking at getting a solar system install at our property. All told it will be around $38k but have a tax credit of around $11k. Currently we get on average a $7k refund every year. If my understanding is correct the credit from the solar will not do anything for us since we already have a refund every year, mainly due to child care and the kids in general. What I am wondering is what is the best way to get that credit? Should I have my taxes on my paycheck adjusted so I am not withholding as much for a year? =====> as you can see,for solar panel The solar credit is a "nonrefundable" tax credit, which means you won't receive any benefit if you already receive a tax refund. You won't see a difference unless you actually owe tax. So say,If you are retired and living on social security and savings, you don't pay tax, so you'd get $0 from the solar panels. If you are married, have a bunch of kids and get a refund of all money withheld anyway, you'd get $0 from the solar panels.
If you currently average, say $1.2k in actual income tax, your $12k investment would create a $3.6k tax credit, but you'd only get back $1.2k the first year. (This would reduce the tax bill, increasing any refund of money already withheld to pay that tax bill.) The remaining amount would carry forward to 2018. You can keep carrying it forward as long as the credit is available.
so, you still claim the solar tax credit if you are getting a refund. what you cannot use this year will carry forward to next year. As mentioned previously,If your federal tax liability is lower than the total amount of your the solar tax credit, ITC savings, you can still take advantage of it by carrying over any remaining credits to the following year.
In short withhold enough to offset the normal $7k refund plus the $11k credit?======>Withhold enough?? you still claim the solar tax credit if you are getting an ADADIATIONAL refund;on the contrary, If you have too little taken out of each paycheck, you?ll owe money when you file your return.
so basically take home an extra $18k in one year. Any other ways to do this?======>as said, unused credit can be carried forward. Please for more accurate info in detail you need to contact an IRS Enrolled Agent/A CPA doing taxes in your local area for your fed/state returns.