Energy-Efficiency Home and Vehicle Tax Credit Credits

[EdZackery]

Are these tax credits refundable or non-refundable?

 

[yorktown]

What do you mean refundable or non-refundable ?


Are you going to make some home improvements, get the tax credit, then have the home improvements removed and you are wondering if you have to refund the tax credit money ?

Did you buy a new vehicle in 2009, apply for the tax credit when you file your taxes, then sell the new car a month after that ?

 

[lakebum431]

No yorktown, he is talking about what type of credit it is (refundable, or non-refundable):

Tax credits may be characterized as either refundable or non-refundable, or equivalently non-wastable or wastable.

Refundable or non-wastable tax credits can reduce the tax owed below zero, and result in a net payment to the taxpayer beyond their own payments into the tax system, appearing to be a moderate form of negative income tax. Examples of refundable tax credits include the earned income tax credit and the additional child tax credit.

A non-refundable or wastable tax credit cannot reduce the tax owed below zero, and hence cannot cause a taxpayer to receive a refund in excess of their payments into the tax system.

To answer the OP's question, both of these are non-refundable tax credits.

 

[EdZackery]

naw.
WE had a new furnace and heat pump installed and they qualify for the max tax credit.
I think the first strike against me is our house is not on Wall Street , USA. Not even on Main St., a side street to boot.
So we are retired and do not have enough income to need to pay any income tax in and have no income tax as a refund.
On the 1040 tax form I can credit the 1500.00 and next is trying to subtract it from 0 tax that I owe.
I read somewhere that a refundable would be paid even if I don't owe, and non-refundable can only be deducted from what I owe. And yet this is a tax credit and not a tax deduction which seems to be the same way to me. I have appointment to talk with a tax person on Wed. to find out why I can't figure this out.

 

[EdZackery]

No yorktown, he is talking about what type of credit it is (refundable, or non-refundable):

Tax credits may be characterized as either refundable or non-refundable, or equivalently non-wastable or wastable.

Refundable or non-wastable tax credits can reduce the tax owed below zero, and result in a net payment to the taxpayer beyond their own payments into the tax system, appearing to be a moderate form of negative income tax. Examples of refundable tax credits include the earned income tax credit and the additional child tax credit.

A non-refundable or wastable tax credit cannot reduce the tax owed below zero, and hence cannot cause a taxpayer to receive a refund in excess of their payments into the tax system.

To answer the OP's question, both of these are non-refundable tax credits.

Thanks, and sorry, I must have been typing when you entered above.
That is what I had in mind when we needed the furnace, and told the salesman that I would not qualify. I'm 67, retired from foundry work, been with our system all my life and never been qualified for anything yet and am sure I never will be.
Then other people say we would get the credit as money so I do want to be sure if I could or not. Heating Co sent me the papers for qualifying so they probably had the cost of the tax credit I won't get built into the price of the unit, so at least they will get theirs.

 

[lakebum431]

No problem at all. Glad to help and sorry you won't get the credit.