30% Federal Solar Tax Credit Guide (IRS Form 5695 Rules)
The Inflation Reduction Act (IRA) expanded the 30% Federal Investment Tax Credit (ITC). Here is how to claim it on your tax return and calculate savings.
1. How the 30% ITC Dollar-for-Dollar Deduction Works
Unlike a tax deduction that simply lowers your taxable income, the Federal Solar Investment Tax Credit (ITC) is a direct dollar-for-dollar tax credit against your federal income tax liability.
IRS Tax Credit Calculation
Tax Credit ($) = Total Installation Cost ($) x 0.30
Example: $25,000 Installation x 0.30 = $7,500 Tax Reduction
Calculate Your 30% Solar Tax Credit
Enter your total equipment and installation costs to calculate your exact IRS tax credit.
Launch Tax Credit CalculatorFrequently Asked Questions
Does the 30% Federal Tax Credit expire?
Under the Inflation Reduction Act of 2022, the 30% Investment Tax Credit (ITC) remains locked at a full 30% rate through December 31, 2032. It steps down to 26% in 2033 and 22% in 2034.
What equipment qualifies for the 30% ITC?
Qualifying equipment includes solar PV panels, inverters, racking hardware, standalone energy storage batteries (3kWh or larger), roof mounting labor, electrical wiring, and permit fees.