IRS Form 5695 is used to claim residential energy credits, including solar panels. The following instructions demonstrate how to enter newly purchased solar panels that will be used to produce electricity. To qualify the solar panels must be for a home located in the United States. For a list of what solar electric property costs qualify for the credit, please reference the IRS Form 5695 Instructions.
For tax year 2022 the credit will be up to 30% of qualified solar electric property costs. This is a non refundable tax credit, so it will only raise the taxpayer's refund if they have tax liability in the current year.
To see if a taxpayer has liability navigate to the 1040 Line 15.
If you receive a subsidy from a public utility for the purchase or installation of an energy conservation product, and you don't include that in your gross income, then you must reduce your basis used to figure the credit.
To add credit for Solar Panels use the following form instructions:
Select Add Form.
Select Form 5695.
If a joint return, choose New Taxpayer's or New Spouse's Occurrence. Double-click to add the form.
Enter the amount paid for solar panels in Line 1.
You can view the amount the taxpayer's residential energy credits from Form 5695 on SCH 3 Line 5.
