Geothermal Tax Credits are Back!

Geothermal tax credits are back!

Great news, but, first things first, a geothermal heat pump is a state-of-the-art heating and cooling system. They are energy efficient, better for the environment than old HVAC tech, and can save tons on your annual utility bill.

Once upon a time (2016), geothermal heat pump owners could get money back on their investment. Then the geothermal tax credits expired, and Congress didn't do anything about them until now (2018). So, yeah, the credits are back, but what does that mean?

Geothermal Heat Pump Renewable Energy Tax Credit 2018

The original renewable energy benefits were established by the Energy Policy Act of 2005. They were later expanded in the 2009 American Recovery and Reinvestment Act. Back then they were something every geothermal heat pump owner should have taken advantage of. The new ones, which should last through 2021, are no different.

The Details

The details are as simple as can be. Do you have a geothermal heat pump installed in your home you live in or another property you own in the United States? Is that geothermal heat pump Energy Star qualified? It probably is, but just check to be sure. It cannot be combined with solar and wind tax credits or any other energy efficiency upgrade credits.

Provided you hit all those requirements, which isn't tough to be honest, you can get a tax credit equal to 30% of the total system cost. This usually consists of the equipment sale price and your installation costs.

And that's it. Do that and you can get a lot of money back along with the best HVAC system on the market. Check out the Residential Energy Credits tax form, fill it out, and give it to your accountant at tax time. For more information, we would refer you to the Internal Revenue Service, a sometimes force for good!

IRS Contact Information

Public Information - IRS

U.S. Internal Revenue Service; 1111 Constitution Avenue, N.W.; Washington, DC 20224; Phone: (800) 829-1040

Web Site: http://www.irs.gov

4 comments (view/add)
  • Reta W. Pelletier
    Reta W. Pelletier
    Posted on 5/14/2018

    Does this take care of ALL my heat needs or is a secondary heat source? My 1992 furnace needs $1000 repairs in 3 safety things, so @ 83 I'm facing repair or replace choices. Is geothermal a consideration or way more expensive?

  • Kyle
    Kyle from Ingrams
    Posted on 5/15/2018

    A properly sized and installed geothermal heat pump should be sufficient for most homeowners. They're also a great way to get dual heating-cooling while you save energy long term (e.g. - 15+ years). However, if you live in a part of the country that experiences severe cold weather, a supplemental heat source can be required. Plus, a geothermal heat pump is considerably more expensive, even with the rebate, than a typical gas furnace. On the other hand, I wouldn't pay $1000 to repair a 26 year old furnace. I would recommend you buy a new furnace. Call us today at 800-360-1569, and we can help you find an effective, low cost furnace to replace your existing system.

  • Dan Kier
    Dan Kier
    Posted on 7/17/2018

    My sources say the designer and installer need to be "certified" to get the tax credit. Can diyers get the credit without the certification?

  • Kyle
    Kyle from Ingrams
    Posted on 7/19/2018

    There is nothing in IRS 2017 Form 5695 that indicates any requirement for "certification" to receive a "Qualified geothermal heat pump property costs" rebate. Further, I've seen nothing in the definition for "Qualified geothermal heat pump property costs" that would require the designer (whatever that means) and installer need to be certified. The only requirements listed in the definition are that the equipment use ground or ground water as a thermal energy source or thermal energy sink and that the equipment meet Energy Star program requirements. Ergo, there appears to be no reason a DIYer should not be able to receive a geothermal tax credit.


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