How do I claim a solar tax credit?

To claim the solar tax credit, you'll need first to determine if you're eligible, then complete IRS Form 5695 and finally add your renewable energy tax credit information to Schedule 3 and Form 1040. What is Form 5695? Form 5695 is the official IRS tax form you must use to claim the federal solar tax credit when you file your taxes.

What if I can't use my solar credit?

If you couldn’t use the full solar credit this year, you can apply the remaining amount to next year’s taxes (and repeat, as needed, until it’s used up). The IRS form titled “Residential Energy Credits”. This is the form you fill out to claim the solar tax credit (and other residential energy credits).

What is the solar tax credit & how does it work?

The Inflation Reduction Act renamed and extended the existing solar tax credit through 2034 for solar system installations on residential property. It also increased the credit’s value. Let's take a closer look at some of the benefits of the solar tax credit and how you can claim it. How does the federal solar tax credit work?

When can I claim a solar system tax credit?

The credit can be claimed for the tax year when the solar system was placed in service. If your project isn’t finished (e.g., waiting on final inspection or utility hookup) until January, then it’s “placed in service” in that year, not the previous one. So install timelines matter for which year’s return to claim the credit.

Can I claim a solar tax credit on a home improvement?

Form 5695 is also used to claim tax credits of up to $3,200 for other home improvements, such as new windows and insulation, through the energy efficient home credit. Does the solar tax credit work with other incentives?

Are there income limits on the solar tax credit?

There are no income limits on the solar tax credit, so all individual taxpayers are eligible to claim the credit on qualifying solar energy equipment investments made to their homes within the United States.