Geothermal Heat Pumps Tax Credit

The EPA and DOE provide a tax credit for geothermal heat properties, equipment, and expenditure. A tax credit is a dollar-for-dollar reduction in the amount of income tax you would otherwise owe. For example, claiming a $1,000 federal tax credit reduces your federal income taxes due by $1,000.

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

(last updated 2/3/23)

Eligibility

Eligible products include:
Qualified geothermal heat pump properties, or 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 expenditures, or expenditures for qualified geothermal heat pump property installed on or in connection with the taxpayer's residence.

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