The Federal Solar Investment Tax Credit (ITC) is one of the most valuable incentives available for solar energy projects. Whether you’re an individual homeowner, a business, or a tax-exempt entity, knowing the correct steps to claim—and potentially monetize—this credit is essential to maximizing its benefits.
How to Claim the ITC
The process for claiming the ITC differs depending on whether you’re an individual or a business.
Individuals: File IRS Form 5695 (Residential Energy Credits) with your annual tax return. This form allows you to calculate the credit based on the total eligible costs of your solar energy system. Credits are terminating for projects after 12/31/2025, making it critical to complete work before that date to secure eligibility.
Businesses: File IRS Form 3468 (Investment Credit) as part of your corporate tax return. This form applies to commercial projects, including those for rental properties or business operations. Projects that start construction by July 4, 2026, have a deadline of four years after the start year to be placed in service to meet the continuity safe harbor. For projects that begin construction after July 4, 2026, the PIS deadline is December 31, 2027.
These timelines can impact project financing, permitting schedules, and procurement strategies—especially for large or complex installations.
