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Do the new federal tax credits help me?

On February 16, 2009, President Obama signed the American Recovery and Reinvestment Act of 2009 (ARRA) into law. The ARRA is designed to get our economy moving again with spending and tax incentives aimed at investing in our nation’s road and energy infrastructure and increasing the energy efficiency and performance of our homes and commercial buildings. How does this relate to heating, cooling and plumbing?

  • Larger Tax Credit for Traditional Heating and Cooling Improvements:
    Homeowners may be able to claim tax credits equal to 30% of the installed costs (up to $1,500) on qualifying equipment.
     
  • Longer Term:
    The new tax credits are retroactive to January 1, 2009, and expire on December 31, 2010... excluding geothermal improvements. The $1,500 limit is for all improvements made during the two year term, not $1500 each year.
     
  • Expanded Geothermal Tax Credits: 
    Homeowners who install qualifying geothermal heat pump systems can claim a federal tax credit of 30% of the installed costs... NO LIMIT! This credit must be claimed during the year the system is placed into service. The $2,000 tax credit limit has been removed. The geothermal tax credit has a longer term, from January 1, 2009 and expires December 31, 2016.
     
Geothermal 30% Tax Credit

The 30% tax credit has been reinstated!

Retroactive to January 01, 2017 for homeowners who purchased a geothermal heating, cooling, and hot water system. 

The tax credit amount will slightly decrease in 2020 and 2021 as a phasing out process. The final tax credit will expire 12/31/2021.

  • In 2020, the tax credit will reduce to 26%
  • In 2021, the tax credit will reduce to 22%

Commercial applications benefit too with the reinstatement of the 10% tax credit. 

Click Here to View Press Release from GeoExchange