Form 3468

Form 3468 investment credit: Who files it and how to claim the credit

Form 3468 is the IRS form businesses use to claim the investment tax credit, a group of incentives that reward spending on clean energy property, historic building rehabilitation and advanced manufacturing. The credit you figure here then carries to Form 3800, which sets how much you can actually use against your tax bill.

What is Form 3468 used for?

Form 3468 calculates several distinct credits, each tied to a different section of the tax code. You complete a separate copy for each facility or property, so a single return can carry several forms at once. The form currently covers six categories of credit, each authorized by its own code section. You report only the parts that match the property you placed in service:

• Rehabilitation credit (section 47) for restoring certified historic buildings
• Energy credit (section 48) for solar, geothermal, fuel cell and energy storage property
• Advanced energy project credit (section 48C)
• Advanced manufacturing investment credit (section 48D) for semiconductor facilities
• Clean electricity investment credit (section 48E) for zero-emission projects placed in service after 2024

Most energy projects start at a 6% base credit that rises to 30% when prevailing wage and apprenticeship rules are met. Bonus adders for domestic content, energy communities and low-income areas can push the rate higher still.

Who needs to file Form 3468?

This is a business credit, so the filer is the company or entity that owns the qualifying property, not an individual homeowner. The form follows the asset and the business activity rather than personal circumstances.

The mix of filers is broad, but they share one trait: a qualifying business asset behind the claim. Common filers include:

• Business owners who install commercial solar, geothermal or battery storage
• Developers rehabilitating certified historic structures
• Semiconductor and clean energy manufacturers claiming advanced credits
• Partnerships and S corporations, which compute the credit at entity level and pass details to owners on Schedule K-1

Form 3468 vs Form 5695: Which credit applies to you?

Many people search for Form 3468 when they actually need Form 5695. The difference comes down to who owns the property and how it is used, and picking the wrong form is one of the most common filing mistakes.

Both forms touch clean energy, but they serve different taxpayers and route through different parts of your return. Here is how the two compare:

• Form 3468 is for business and commercial property, including rental and income-producing assets
• Form 5695 is for the residential clean energy credit homeowners claim on a main or second home
• Form 3468 credits flow through Form 3800, while Form 5695 is claimed directly on your individual return

If solar panels sit on a home you live in, you will generally use Form 5695 instead. Mixed-use property, such as a home with a qualifying business portion, may involve both forms. In these situations, the cost of the solar energy system may need to be allocated between the residential and business-use portions of the property.

How to claim the credit for solar panels on Form 3468

For commercial solar placed in service after 2024, the credit usually falls under the section 48E clean electricity investment credit in Part V. You complete a separate Form 3468 for each facility, then enter the qualifying details for that property.

The process moves from confirming eligibility to carrying the final figure onto Form 3800. Follow these steps:

• Confirm that the property is used for business purposes and was placed in service during the tax year.
• Gather the cost basis, placed-in-service date and any prevailing wage and apprenticeship records.
• Complete Part I with the facility information, then complete the applicable credit section.
• File Form 7220 if you are claiming the increased credit rate for meeting prevailing wage and apprenticeship requirements.
• Carry the total credit amount to Form 3800 to apply it against your tax liability.
• Keep documentation that supports the property's basis and placed-in-service date, as these records may be needed if the IRS reviews your return.

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