**UPDATE 08/18/2022** As part of the Inflation Reduction Act of 2022 signed into law on August 16, 2022, residential energy efficiency tax credits have been extended through 2032. This information applies to the existing tax credits for 2022. Changes to residential energy efficiency tax credits under the Inflation Reduction Act will become effective starting in 2023.
Tax credits for residential energy efficiency and those for builders of energy efficient homes were extended. Tax deductions for energy efficient commercial buildings allowed under Section 179D of the Internal Revenue Code were made permanent under the Consolidated Appropriations Act of 2021.
The tax credits for residential renewable energy products are now available through December 31, 2023. Renewable energy tax credits for fuel cells, small wind turbines, and geothermal heat pumps now feature a gradual step down in the credit value, the same as those for solar energy systems. As of 2021, biomass fuel stoves are included in tax credits for residential renewable energy products.
*Disclaimer: The tax credit information contained within this website is provided for informational purposes only and is not intended to substitute for expert advice from a professional tax/financial planner or the Internal Revenue Service (IRS).
E&J Geothermal knows how much of an investment a new heating, air conditioning, air quality or geothermal system can be. That's why we want to help you protect your investment!
Service AgreementsResidential Clean Energy Credit (25D): Increases residential credit to 30% for GSHP for systems installed starting in 2022 (after December 31, 2021) and extends the credit through 2034 (26%/22% phase out in final two years); the credit is not refundable, but can carry forward to future tax years.
Commercial Tax Credit (48(a)): Increases commercial credit to 30% for GSHP and extends through 2034 (26/22% phase out in final two years); refundable only for state/local/tax-exempt organizations. The rate increases to 40% if projects use components and manufactured goods that meet domestic content requirements.
The credit will be available to consumers on a first-come, first-served basis with a cap on total funds available of $1million annually. There will be a wait list if the funds are depleted for the year. Applicants on a waitlist will be first in line for the next year. We expect more information from Revenue as questions come up.
As of today, taxpayers can apply for the credit for those taxpayers who have a geothermal heat pump installed on their residence on or after January 1, 2019. The deadline to submit an application is May 1 of the following year of installation. The Credit is equal to 20% of the federal residential energy efficient property tax credit allowed for geothermal heat pumps provided in section 25D(a)(5) of the Internal Revenue Code.
Energy Efficient Home Improvement Credit (25C): Restores/creates 30% residential tax credits through 2032 for:
New Energy Efficient Home (45L): Increases the credit, through 2032, for developers upon sale of a house of $2,500 (EnergyStar single family home) or $5,000 (Zero-energy ready home), and extends credit through 2032.
Hope for HOMES: $4.3 billion. Provides funding for State energy offices for whole-home rebates for retrofits of up to $4,000/home for market rate customers, $8,000 for LMI homes (for energy savings >35%). Installation of a geo heat pump would meet the criteria for the maximum rebates.
High Efficiency Electric Homes Rebates (HEEHR): $4.5 billion over 10 years. Provides fundings through State Energy Offices and Tribes for rebates for electric appliances. Rebates 50% or 100% of project cost, up to measure-specific caps $8,000 for gshp or ashp, $1,750 for a HPWH, and $4,000 for MPU + $2,500 for wiring. Total home cap of $14,000 cap.
* All rebates are subject to change
Call for details on incentives today, whether E&J Geothermal has done work for you in the past or if you are thinking about having us install equipment - we are here to help.
