Much to the delight of geothermal installers and energy conscious homeowners nationwide, a federal tax credit of 30% was established by the Energy Policy Act of 2005, and later extended to 2016. But time is running short. The 30% federal tax credit is set to expire December 31, 2016.
The program allows residential consumers to claim a tax credit equal to 30% of spending on qualified geothermal heat pumps placed in service before the end of 2016. The tax credit can be used to offset both regular income taxes and alternative minimum taxes. If the tax credit exceeds the income tax liability, the current program allows the remaining balance to be carried forward into future years. Consult your tax professional for all the details.
Many states and local utilities offer tax incentives, rebates or low interest loans to encourage the installation of geothermal heat pumps. Please contact your tax professional, electric utility or installing dealer to find out what is available in your area. You can also check the EarthLinked website for more rebate resources: http://earthlinked.com/tax-credit-info-and-rebates
Consumers who wait until late 2016 to install a system may find they are unable to have the systems installed before year end. Demand has increased dramatically as homeowners nationwide order geothermal systems to beat the December 31 deadline.