Geothermal Heat Pumps Tax Credit
The following Residential Clean Energy Tax Credit amounts apply for the prescribed periods:
- 30% for property placed in service after December 31, 2016, and before January 1, 2020
- 26% for property placed in service after December 31, 2019, and before January 1, 2022
- 30% for property placed in service after December 31, 2021, and before January 1, 2033
- 26% for property placed in service after December 31, 2032, and before January 1, 2034
- 22% for property placed in service after December 31, 2033, and before January 1, 2035
- How to Claim the Federal Tax Credits
- Strategies to Maximize Your Federal Tax Savings
- Claim the credits using the IRS Form 5695.
- Instructions for Form 5695
- Instructions for Form 5695 (Print Version - PDF)
What products are eligible?
Qualified geothermal heat pump property:
Equipment which:
(1) uses the ground or ground water as a thermal energy source (to heat), or as a thermal energy sink (to cool) a home, and
(2) is ENERGY STAR certified.
Qualified geothermal heat pump property expenditure:
An expenditure for qualified geothermal heat pump property installed on or in connection with the taxpayer's residence.
Who can use this credit?
Existing homes and new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify.
This system must be installed in connection with a dwelling unit located in the United States and used as a residence by the taxpayer. The home served by this system does not have to be the taxpayer's principal residence.
A principal residence is the home where you live most of the time. The home must be in the United States. It can include a house, houseboat, mobile home, cooperative apartment, condominium, and a manufactured home.