IRA Solar Tax Credit Extended: How to Claim Your 30% in 2025
The Inflation Reduction Act solar tax credit remains at 30% through 2032. Here's exactly how to claim it on your 2025 taxes.
The 30% federal solar Investment Tax Credit (ITC) — extended by the Inflation Reduction Act — remains one of the most valuable incentives available to American homeowners in 2025.
What the Credit Covers
The ITC applies to 30% of the total system cost, including:
- Solar panels
- Labor and installation
- Inverters and battery storage
- Permitting fees
If your system costs $20,000, you receive a $6,000 tax credit — directly reducing your federal tax bill.
How to Claim It
- Install a qualifying solar energy system at your primary or secondary residence
- File IRS Form 5695 with your tax return
- Enter the credit on Schedule 3 of Form 1040
The credit is non-refundable — it can reduce your tax liability to zero, but you won't receive a check for any excess. However, unused credit rolls over to the next tax year.
Key Deadlines
| Year | Credit Amount | |------|--------------| | 2022–2032 | 30% | | 2033 | 26% | | 2034 | 22% | | 2035+ | 0% (residential) |
Does It Stack With State Incentives?
Yes. The federal ITC is separate from state-level rebates and utility incentives. In states like California, Massachusetts, and New York, total incentives can reduce system costs by 50% or more.