I plan to install solar in my home and buy an electric car. The solar tax credit will be $6,135 (30% of $20,450 or the total cost), and the electric car credit will be $7,500. Is there a chance that I will not be able to get these credits within the same tax year, due to alternative minimum tax (AMT)?

ANSWER

The BIDaWIZ Team's Answer:

Yes, you can apply both credits in the same year to reduce the alternative minimum tax as per IRC Section 25D. Please note that the solar tax credit is applied first and then the electric car credit is applied. These amounts are applied until the regular tax and the AMT tax are zero. Any unused credits, would be carried forward to future years. Thus, if your total tax credit was $13,135 and your alternative minimum tax was $10,000, you could apply $10,000 of the credit to this year's return and then the balance or $3,135 to the following year should you have a tax liability.