Do I have it correctly understood that the federal energy tax credit works this way:
it is a "non-refundable" credit (of 30% of a new boiler's cost and up to $1500), so that if the homeowner didn't pay $1500 in tax then you don't get that $1500 credit. I haven't worked this year, so I owe no fed tax.
Thanks.
That's the way I understand it. Ask at IRS.gov several times and see if they all agree.
Are you saying you are not filing taxes this coming year? Consult your tax advisor would be my advice. Even if I " owe no fed tax" I still want to claim my deductions for mortgage interest, etc. What about state filings?
Look-see here for energy tax credits and how they work.
Given that, they would still need to meet the efficiency rating.
"Must be an existing home & your principal residence. New construction and rentals do not qualify."
Last year, my new garage door qualified. This year a new HVAC unit is ready for the coming tax filing.
As I mentioned, speak with your tax advisor.
State Income taxes? _As I mentioned, speak with your tax advisor._ ?!
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But he's talking about federal income tax and the energy tax credit, not state. And regardless, if he has NO income, then how can he have state income tax due either? There is no point to him filing a federal return and taking mortgage interest deductions if he has no income. You can't deduct from what you don't have. If you have no income, no withholding, no tax liability, then there is no need to file a return.
Not sure what you mean by "non-refundable", but otherwise my understanding agrees with yours. I'm in a similar situation, but I have a couple of IRA-type accounts from which I can withdraw not-yet-taxed money without penalty (in one case because I'm old enough, in the other case because it's an inherited IRA). So I am in the process of figuring how much I need to withdraw so that I owe $1500 in tax so that I get the tax credit resulting from installing metal roofing this year.
Unlike some deductions, you cannot carry it forward to a future year.
Edward
From past experience, I know what you mean by "see if they all agree". But I did call anyway and the person who answered did say: the credit can only reduce your tax bill - you can't benefit at all from it if you owe no taxes.
So that differs from, say, huge corporations which might pay little or no taxes but can still benefit from government handouts in return for exporting jobs to China or just directly wrecking the economy.
By the way, it seems that these days whenever anybody answers at IRS, they first give their ID number. I'd suppose that allows them to track anyone who is giving out a lot of incorrect answers.
Ot those who completely sponge off the dole and qualify for the Earned Income Tax credit. There are a couple others that you don't need to actually have a tax to benefit from.
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You might want to re-read that section. As it name implies, you need to *earn* some income to qualify. There are a bunch of other qualifiers, too.
Jim
An "income" may (or not) be required, but the tax rate can easily be negative. A significant population indeed does have a negative income tax rate.
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