Tax Credits Available for Homeowners with a Geothermal Heat Pump System

Tax Credits Available for Homeowners with a Geothermal Heat Pump SystemOver the long term, a geothermal heat pump system could be the answer to high energy bills that result from heating and cooling your home. A geothermal heat pump (GHP) is one of the most environmentally friendly and dependable ways to keep your home comfortable year-round, since they use so little energy. The American Recovery and Reinvestment Act of 2009 established a 30 percent tax credit for homeowners who install a qualifying GHP before the end of 2016.

A GHP works by exchanging heat using an underground loop field instead of doing so above the ground. Underground, temperatures are stable year-round. A GHP will produce the same amount of heat whether it’s -30 degrees F or 40 degrees.

About the Credit

This generous credit lets you claim nearly the entire cost of the system, including installation, with no cap on its cost. The credit covers the equipment and installation and the only exempt portions are the ductwork or any modifications your existing ducts may need for a geothermal heat pump system. An emergency heating coil is also not covered.

Since it’s a tax credit, not a deduction, you won’t have to itemize your federal taxes to take advantage of it. Instead, the credit applies to the amount of taxes you owe. If you claim a $30,000 system, your tax liability will be reduced by 30 percent, reducing the amount you owe by $9,000. If you owe less, you can carry the credit forward into future tax years.

Benefits

This program is mutually beneficial. A GHP uses much less electricity than other kinds of HVAC equipment winter and summer, which helps reduce greenhouse emissions on a more global scale. Closer to home, a GHP reduces heating bills, and for the typical homeowner, this can ease a tight budget over the course of a long, cold winter.

If you’d like to learn more about the benefits of a geothermal heat pump system, contact the experts at Team Bob’s Heating Cooling Plumbing, proudly serving the HVAC needs of homeowners in Grand Traverse County and surrounding areas for more than three decades.

Our goal is to help educate our customers in Traverse City, Michigan and surrounding areas about energy and home comfort issues (specific to HVAC systems). For more information about geothermal tax credits and other HVAC topics, download our free Home Comfort Resource guide.

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