Solar Tax Credit Calculator 2026
The federal solar Investment Tax Credit (ITC) gives you a 30% credit on your solar system cost - one of the largest residential tax breaks available. Calculate your exact savings and learn how to claim it correctly on your federal return.
How to Claim the Solar Tax Credit
- 1
Install solar and pay for the system (you must own it)
The ITC is only available to homeowners who purchase their system outright or with a solar loan. Lease agreements and PPAs do not qualify - the leasing company claims the credit instead. Make sure your contract specifies ownership transfer to you at installation completion.
- 2
Get your final installation invoice showing total cost
Your installer must provide a final invoice detailing the total cost of the solar energy system, including panels, inverters, mounting hardware, and installation labor. Battery storage costs are also eligible if the battery is charged exclusively by solar. Keep all receipts.
- 3
File IRS Form 5695 (Residential Energy Credits) with your federal return
Download Form 5695 from IRS.gov or use tax software (TurboTax, H&R Block, TaxAct all support this form). The form guides you through calculating your credit. You'll need your total qualified solar costs from your installation invoice.
- 4
Enter your solar system cost on Part I, Line 6a
On Form 5695, Part I covers the Residential Clean Energy Credit (solar, wind, geothermal). Line 6a is specifically for solar electric (photovoltaic) system costs. Enter the total from your invoice. The form calculates 30% automatically on Line 13.
- 5
The calculated credit appears on Line 15 - apply to your tax liability
Transfer the amount from Form 5695, Line 15 to Schedule 3, Line 5 of your Form 1040. This directly reduces your federal income tax owed. If the credit exceeds your tax liability, only the amount up to your liability is applied this year.
- 6
Carry forward any unused credit to next year
The ITC is non-refundable but carries forward indefinitely. If your tax liability is less than the credit amount this year, the unused portion automatically carries forward to the next tax year on Form 5695. There is no limit on carry-forward years through the credit's active period (through 2034).
Federal ITC Schedule
| Installation Year | Credit Rate | Notes |
|---|---|---|
| 2022-2032 | 30% | Full ITC - Inflation Reduction Act extended and increased the rate |
| 2033 | 26% | Step-down begins - act before this deadline |
| 2034 | 22% | Final year with meaningful credit |
| 2035+ | 0% | Residential credit expires (commercial continues at 10%) |
Source: Inflation Reduction Act (IRA), August 2022. Subject to Congressional action.
Sources: IRS Form 5695 • IRS Publication 946 • Inflation Reduction Act (2022) • Database of State Incentives for Renewables & Efficiency (DSIRE)