IRS Form 5695: how to claim a 2025 solar credit you have not filed yet

Form 5695 is now a prior-year form for solar. The Residential Clean Energy Credit under Section 25D does not apply to expenditures made after December 31, 2025, so nobody is claiming it for a 2026 installation. The people still filing it are those whose system was completed in 2025 or earlier and who have a return to file, a return to amend, or an unused credit balance to carry forward.

This guide covers Part I of the 2025 Form 5695 line by line, the deadlines that still apply in 2026, and the carryforward mechanic that most people miss.

Can I still claim the solar tax credit on Form 5695?

Only for a tax year in which the expenditure was actually made. In practice, that means 2025 or earlier.

The 2025 Form 5695 instructions (opens in a new tab) state: “You can’t claim residential clean energy credits for expenditures made after December 31, 2025.” An expenditure is treated as made when the original installation is completed, not when you paid or signed.

Three situations still produce a filing in 2026:

Which tax year do I file for?

The year the installation was completed. Not the year you signed, paid a deposit, financed, or received permission to operate.

For a system completed in November 2025 and energized in January 2026, the expenditure year is 2025. For one completed in January 2026, there is no credit at all, because the repeal applies to expenditures after December 31, 2025. The federal credit’s repeal and its transition rules cover that boundary in detail.

One exception sits in the same statutory subsection: for a newly constructed or reconstructed home, the expenditure is treated as made when your original use of the structure begins.

Part I of the 2025 Form 5695, line by line

Part I is the Residential Clean Energy Credit. Solar and battery storage both live here. Part II is a separate credit for insulation, windows, doors, and heat pumps.

The form carries a note at the top of Part I: skip lines 1 through 11 if you only have a credit carryforward from 2024. That matters for anyone whose credit exceeded their liability in a prior year.

Line 5a is a checkbox with real consequences

A battery below 3 kWh of capacity produces no credit at all, and the form gives you no partial allowance.

Lines 15 and 16 do different jobs

Line 15 is the only figure that flows onto your return. Line 16 is the figure that determines whether anything is left for next year.

What if my tax bill was smaller than my credit?

The credit is nonrefundable. It offsets tax you owe and never turns into a refund on its own. Whatever it cannot absorb this year drops to line 16 and carries into the next year, where it enters that year’s Form 5695 on line 12.

A worked carryforward example

Here is the mechanic on a worked example. Assumptions stated: a $24,000 PV system with no battery, completed in October 2025, no rebates received, and modest tax liability in each year.

View the numbers as a table

Unused credit remaining after each year, worked example — full dataset

Period	Carryforward balance ( $)
2025	4600 $
2026	1900 $
2027	0 $

Illustrative. Assumes a $24,000 system completed in 2025, a 30% credit of $7,200, no rebates, and tax liability of $2,600, $2,700, and $2,800 in 2025, 2026, and 2027. Your figures will differ.

Three years to absorb a credit is not unusual for a household with a modest federal liability. Any solar quote from 2025 that presented the credit as a lump sum arriving the following spring was describing the best case, not the typical one.

One caveat worth naming

Section 70506 of Public Law 119-21 struck the termination date in Section 25D, but the carryforward rule in Section 25D(c) was not itself repealed. The IRS FAQ on the Public Law 119-21 modifications does not address carryforward directly. If you are carrying a balance into 2026 or later, confirm the treatment with a CPA or enrolled agent before relying on it.

How does the IRS verify a solar tax credit?

Not by anything you attach to the return. You are not filing receipts, contracts, or certificates with Form 5695.

The instructions state that you can rely on the manufacturer’s written certification that a product is qualifying property, and are explicit about what to do with it: “Don’t attach the certification to your return. Keep it for your records.”

What to keep in your own records

Verification, if it happens, happens in examination. What is worth keeping:

• The contract and final invoice, showing itemized equipment and labor
• Proof of the completion date, which is the date that determines the tax year
• Manufacturer certification statements for panels and any battery
• Battery specifications establishing capacity of at least 3 kWh
• Documentation of any rebate or subsidy received, and its amount
• Proof of payment

Do rebates reduce what I can claim?

Yes, in most cases. The instructions direct you to “reduce your cost for the product by the amount of that subsidy,” and state that amounts provided by subsidized energy financing cannot be used to figure the credit.

A $400 utility rebate on a $24,000 system leaves $23,600 as the basis for line 1, which reduces a 30 percent credit by $120. In Arizona this mostly matters for federal filings, because the state credit is capped at $1,000 and reaches that ceiling at $4,000 of cost regardless. Which Arizona rebates actually exist covers the handful of real programs and the ones commonly misreported.

Who cannot claim it

Leases and power purchase agreements

If a third party owns the equipment, the homeowner has no qualified expenditure. The equipment owner is claiming a business credit instead, and any benefit reaches you only through the pricing of the agreement.

Landlords who do not live in the home

The IRS states you cannot claim the credit “if you’re a landlord or other property owner who doesn’t live in the home.”

Anyone whose installation finished after December 31, 2025

No exceptions, regardless of when the contract was signed or the deposit paid.

Second homes and shared occupancy

Second homes are treated differently than people expect. Solar electric, solar water heating, small wind, geothermal, and battery storage property does not have to be your main home. Fuel cell property does. That asymmetry is in the instructions and is easy to get backwards.

Where two or more people who are not married occupy the same home, each completes a separate Form 5695, with allocation rules that apply specifically to fuel cell property.

Amending a return you already filed

If you filed a 2025 return and left the credit off, the fix is Form 1040-X. A claim for refund is generally due within three years of the date the original return was filed, or two years from the date the tax was paid, whichever is later. For a 2025 return filed in April 2026, that leaves a wide window, but the credit is not self-executing. Nobody at the IRS will add it for you.

Amending also matters if the completion date on your original filing was wrong. The completion date is the entire test for eligibility.

Arizona’s credit is a separate form

Form 5695 is federal only. Arizona’s 25 percent credit, capped at $1,000, is claimed on Arizona Form 310, which must be filed together with Arizona Form 301, the nonrefundable individual tax credits schedule.

The state credit has its own quirks: it is nonrefundable with a five-year carryforward, the $1,000 cap is cumulative across all years for the same residence rather than annual, and the seller must provide a compliance certificate stating that the device meets Arizona’s requirements. The Arizona incentives guide covers Form 310 and the underlying statute.

Filing the federal form does not file the state one, and the two use different definitions of qualifying cost.

The mistakes that cost people money

1. Using the contract date instead of the completion date. The completion date is the only date the statute cares about.
2. Skipping line 12. A carryforward from the prior year is lost if you do not carry it in.
3. Answering line 5a without checking the specification sheet. A battery under 3 kWh disqualifies itself.
4. Ignoring line 16. If line 15 is smaller than line 13, there is a balance, and it only survives if you record it.
5. Filing Form 310 without Form 301. Arizona’s instructions require both.
6. Assuming the credit produces a refund. It offsets liability. With no liability, it produces nothing this year.

Form line numbers and labels in this article were taken from the 2025 Form 5695 and its instructions as published by the IRS, verified August 9, 2026. This is general information about a tax form, not tax advice. Confirm your own filing with a tax professional.

Related reading

• The federal solar tax credit ended explains the repeal, the expenditure test, and what it does to Arizona payback math.
• Arizona solar incentives and tax credits covers Form 310, Form 301, and the state statutes.
• Arizona solar rebates in 2026 covers the utility programs that reduce your basis.
• Is solar worth it in Arizona? puts the remaining incentives into a payback calculation.

• Incentives
• Solar Basics
• Arizona