Geothermal Heating And Cooling System Tax Credits

The 30 percent federal income tax credit is still alive in 2020.

Geothermal heating and cooling system tax credits.

This credit is inclusive of the entire geothermal heating and air conditioning system with the exception of the duct work. While the 30 credit expired at the end of 2019 a 26 credit is still available through 2020. The energy tax credit can be combined with solar and wind credits as well as energy efficiency upgrade credits. However it was reinstated in 2018 to include not just households with geothermal heat pumps installed in 2018 but it also retroactively included any geothermal heat pumps installed after january 1 2017.

Home tax credits rebates savings please visit the database of state incentives for renewables efficiency website dsire for the latest state and federal incentives and rebates. Us tax credits through 2021. 30 for systems placed in service by 12 31 2019. Again this is a tax credit not a rebate.

In 2020 the federal tax incentives known as the investment tax credit itc will cover 26 of a dandelion geothermal system. In 2008 the program was broadened to include geothermal heating and cooling systems. However the percentage covered by the itc will decrease next year with tax credits covering 22 of a ground source heat pump system in 2021 and potentially 0 in 2022. Congress recently reinstated geothermal tax credits for residential and commercial geothermal heating and cooling systems.

The tax credit can be used to offset both regular income taxes and alternative minimum taxes amt. Closed loop water to air heat pumps must have an eer energy efficiency ratio of 17 1 or greater and a coefficient of performance cop or 3 6 or more. They provide a 30 percent tax savings for residential installations and a 10 percent commercial tax credit. If the federal tax credit exceeds tax liability the excess amount may be carried forward into future years.

Review requirements credit amounts and more information. In order to qualify your unit must meet certain minimum criteria. Spending on geothermal heat pump property adds to your home s cost basis but also must be reduced by the amount of the tax credit received. The energy tax credit can be combined with solar and wind credits as well as energy efficiency upgrade credits.

View available federal tax credits for geothermal heat pumps. This credit is for homeowners updating a current heating system and for new construction. Federal tax credits cover up to 30 of the cost of installing a geothermal heat pump on your property. Geothermal heat pumps are similar to ordinary heat pumps but use the ground instead of outside air to provide heating air conditioning and in most cases hot water.