If you are hoping to cut down on your energy use, you may have researched geothermal heating and cooling. However, the cost of installing a geothermal heat pump system tends to be high. The good news is that federal geothermal tax credits provide a generous monetary incentive that could put this heating and cooling option within your reach. And after it’s installed and operating, the long-term energy savings will make it an even better option.
Geothermal Tax Credits
A federal tax credit allows homeowners to claim up to 30 percent of the cost of a qualifying geothermal heat pump and installation. The fact that this is a credit rather than a deduction means that taxpayers are actually able to reduce the amount of taxes that they owe dollar for dollar by claiming the credit.
How to Qualify
Federal regulations state that only people who have had a qualified geothermal heat pump installed may take advantage of the tax credit. There are two criteria that apply:
- Geothermal pumps must utilize the ground or ground water in order to provide heating and cooling for a building.
- Geothermal systems must be Energy Star-certified in order to qualify a property owner for the tax credit.
It’s important to note that the tax credit can be claimed on a property that does not serve as a primary residence.
State Tax Credits
Many states offer geothermal tax credits as well, while some utilities also offer incentives. The state tax credits can be claimed at the same time that federal credits are claimed to reduce tax liability even more. Consult with an HVAC professional to find out how much you can claim.
Ineligible Costs
Some people who decide to use geothermal energy also have a back-up heating and cooling system installed in case there is a problem with the heat pump. The cost of this equipment and associated labor costs cannot be claimed.
Professional Geothermal Installation
Geisel Heating, Air Conditioning and Plumbing provides a full range of HVAC services to customers in the greater Cleveland area. Experienced technicians are able to complete geothermal installation services while helping customers determine their eligibility when it comes to geothermal tax credits. Please contact us at Geisel today to request more information or to schedule an appointment.
Our goal is to help educate our customers in Cleveland, Ohio about energy and home comfort issues (specific to HVAC systems). For more information about geothermal tax credits and other HVAC topics, download our free Home Comfort Resource guide.
For those Do it Yourselfers who would rather take control of your own indoor comfort, you can shop our online store for replacement parts, products and accessories!
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