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November 2020

geothermal tax incentives

Geothermal Benefits: Behind the Tax Incentives

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A geothermal heat pump is an efficient, environmentally-friendly heating and cooling system. Unlike other heat sources, when you have a geothermal HVAC installed, you have renewable energy stored in your backyard. This is cheaper than fossil fuels and saves you on energy costs too.

In addition to energy and cost savings, you can also save on your taxes.

What Are the Tax Credit Amounts?

Before you invest for the tax credits, you probably want to know what the tax credits are. How much can you save? What percentage of the HVAC cost can you use as a credit on your taxes? The tax percentage has everything to do with the year that you installed it.

For HVACs installed between 2016 and 2019, you can take a credit of 30%. For those who installed in 2020, you can take a 26% credit. Then, in 2021, the credit will be 22%.

Do You Qualify for the Tax Credits?

If you have a geothermal HVAC system installed, you qualify. You do not have to worry about maximum tax credits. The year that you installed your geothermal HVAC system is what matters since your percentage is based on that year. It doesn’t matter if your home is a rental, a vacation home, or a primary home that you have ownership of. You can take the tax credit on any home that belongs to the system. If you have other tax credits, such as the energy efficiency upgrade, you can use it with those credits. If you do not have enough liability, you can carry the tax credit forward to the next year.

A geothermal heat pump can save you money in many ways, with tax incentives just being one. At Chesapeake Geosystems, we provide installation of residential geothermal HVAC systems along with water well drilling and repair. Call 410-489-1712 or email us today for more information!