Residential Tax Incentive

Legislation gives a tax credit process for the installation of residential geothermal heat pumps. Residential customers who install a geothermal heat pump may be eligible for a tax credit. The tax credit is currently 26% of the cost of system installation, with no cap in place.

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A homeowner may collect the full 26% of the system installation cost, as a tax credit for systems installed until December 31, 2020.

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If a homeowner is not able to use the entire tax credit in the year the system is installed , the homeowner may carry the unused portion of the credit to the next year.

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Federal incentives can be combined with grants and other rebates from state, county, and local governments that encourage use of renewable energy sources. 

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System's must be installed in the taxpayer's residence (This is not limited to primary residences) 

In order to receive the credit the taxpayer must file IRS form 5695. More information can be obtained from your accountant or irs.gov

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