Geothermal Tax Credits, Rebates & Deductions
Geothermal Heat Pump Provisions in the Inflation Reduction Act
In addition to experiencing the cost saving efficiency of a ClimateMaster geothermal heating and cooling system, there are now immediate cost savings available to make your investment even more affordable. This page is a guide to help you find the local, state and federal tax credits, rebates and deductions.
NOTE: We are not tax professionals, and this should not be interpreted as tax advice. Please consult your own accountant and/or lawyer for guidance on claiming any of the following incentives.
Residential IRA Tax Incentives for Geothermal
Homeowners can now receive 30% on the installation of new geothermal systems with federal tax credits offered because of the Inflation Reduction Act legislation passed in August of 2022.
Click for the Residential Tax Incentives Brochure
Claiming the Credit
IRS Form 5695 is used to claim the Residential Energy Credit. For more information check the following links (these will open in new tabs).
Commercial IRA Tax Incentives for Geothermal
The Inflation Reduction Act (IRA), signed into law on August 16, 2022, substantially extends and enhances the federal income tax credits and incentives available for the installation of geothermal heat pump (GHP) systems in commercial buildings. The IRA includes the introduction of a new direct payment option for non-taxable entities.
For taxable businesses, there are also new carryback and transfer provisions along with a continuation of the accelerated depreciation benefits. Because the requirements for taking advantage of these incentives are very specific, we have designed a guide that provides a detailed evaluation of the new tax and depreciation incentives available for commercial GHP energy property under the IRA.
Additional State and Local Geothermal Energy Tax Incentives Available
Check New York state and local governments! There may be additional incentives for installing a ClimateMaster geothermal heating and cooling system. Visit the DSIRE Website to find out if there are state and local commercial and residential energy tax credits available in your area.
NYSERDA Guide to Inflation Reduction Act Savings
IRA incentives are designed to save consumers money on appliances, equipment, and services that save energy and cut greenhouse gas emissions. It’s important to note that rebates and tax credits work differently, with rebates providing more upfront savings and tax credits lowering the amount of tax you owe on future tax return(s).
NYS Clean Heat
NYS Clean Heat also provides rebates for ground source heat pumps, which are eligible for a 30% IRA tax credit and 25% New York State income tax credit. Heat pump systems are being installed more frequently across New York and the U.S., with national heat pump sales surpassing gas furnaces in 2022.
Rewiring America
Rewiring America also has some tax credit info and just some really great clean energy info.