My Wife and I are 68 & retired and basically only have SS income to report.
Our Schedule A deductions are higher than the standard but even with the standard deduction we end up with $0 tax due. Also Arizona doesn’t tax SS income. We haven’t paid Fed or State taxes in years.

This year I installed a solar system at our home. I did almost all of the work and paid cash for all the components and subcontracting. It only cost me about 10k instead of the 24k estimates I got from installers. 🙂 (also I didn’t count any of my labor in the cost- as I know that is a no-no)
The tax credits I can get are $1000- AZ and 30% Fed which amounts to about $3000 ($4000 combined)

Since I don’t have any tax liability, how can I use the solar tax credits for 2017 taxes?
I know i I can roll them forward for a few years but may not have taxable income for a couple years- eating up the deferral time and would like to get started now.

One idea I have is that if I withdraw money from the IRA, or move some into my Roth IRA, that will count as additional income and will generate a tax due – I’m pretty sure I can then use the tax credit to offset that tax due and get use of the money “tax free”. correct?

I opened a regular IRA back when they came out in the 70’s and contributed to it over 40 years including rolling various employer 401k’s into it when I changed jobs. I also opened a Roth IRA in 2006 so it is over the 5 yr mark. The ast 401k I rolled over into the IRA was in 2009.

Using this years HRBlock tax program I did some what-if’s and came up with one plan where I could withdraw upto 18500 from the IRA before any fed tax would be due but that only used 300 of the 3000 credit. I would be still be fine with AZ but I can’t do that this year because it has to be claimed as income in the year taken and Dec31 is past.

The next option is to convert $6500 from my IRA to the Roth before April 15 this year (trustee to trustee or do I take distribution & redeposit), objective is to count it as income for 2017 if possible (this is the main question) .

Then later this year, for TY 2018 again move $6500 from IRA to Roth and withdraw $12000 cash, then use the rolled forward tax credits to offset that income. Continue this plan until credits are used up or run out and at the same time reduce the $ amount in the trad. IRA to reduce the required Min. Dist. when I turn 70.5 in 2 years. Leave the Roth intact for later needs.

So my questions are…
Will this plan work?
Can I (& How) move $ from IRA to Roth in 2018 and claim it as 2017 income?

Any other known ways to use the solar tax credit?

thanks for your advice
Al