Geothermal Tax Credits
Reinstated Geothermal Tax Credits
In October 2008, the U.S. Congress passed The Emergency Economic Stabilization Act of 2008 (H.R. 1424), extending the Investment Tax Credit (ITC) to include geothermal heat pumps installed after October 3, 2008 until 2016. This tax credit was reinstated retroactively to include Geothermal Heat pumps installed after Jan. 1, 2017 and extended to Jan. 1, 2022.
Geothermal Systems purchased in 2017, 2018, 2019: 30% Rebate
Geothermal Systems purchased in 2020: 26% Rebate
Geothermal Systems purchased in 2021: 22% Rebate
The language also changes an important consideration for commercial GHP projects, making them eligible if commenced by Jan. 1, 2022 rather than placed in service.
Receiving Your Incentives
To qualify, a system must be placed in service after October 3, 2008 and no later than December 31, 2021. To collect this credit the taxpayer would need to complete IRS Form 3468. The form will need to be reviewed by the IRS, to reflect the addition of geothermal heat pumps as “qualifying equipment”. There are no specific requirements for how the expense must be reported, however it would be helpful if the report clearly states “geothermal heat pump installation” on the contract or invoice. Please consult with a tax professional for more information on what incentive opportunities are available to you.
Visit EnergyStar’s Website for Complete Details and Documents (Tax Form 5695) Here: