The Federal Geothermal Tax Credit covers 30% of the expenditures in the year the incentive is taken, up to a cap of $2,000 if the property was installed prior to January 1, 2009. Qualifying geothermal heat pump property installed after December 31, 2008 is eligible for 30% of the installed cost without a cap, as provided under the American Recovery and Reinvestment Tax Act of 2009 (ARRA) . The incentive is available for taxpayers installing qualifying equipment at their primary residence or a second home, but not for a rental property.
Not only is installing a geothermal heat pump energy efficient and great for the environment, there are also some incredible savings available to homeowners who take advantage of Federal and State Geothermal Tax Credits before they EXPIRE December 31, 2016. Get a 400% efficient geothermal system that will save you 70% on your annual heating, cooling and hot water bills by using the thermal energy stored deep in the ground. For Iowa homeowner’s, the cost to purchase and install a geothermal system has never been more affordable with Federal AND State Geothermal Tax Credits totaling 36%, plus our same-as-cash financing options.
Federal Geothermal Tax Credit
Iowa State Geothermal Tax Credit
Geothermal heat pumps installed on residential property in Iowa are eligible for a State Geothermal Tax Credit equal to 20% of the Federal Tax Credit, which is 30%. This means that the Iowa State Tax Credit is equal to 6% of the system cost. Any credit in excess of the tax payer’s liability may be carried forward for up to 10 years. The credit may be applied retroactively to systems installed beginning January 1, 2012. The Iowa Department of Revenue must issue rules for implementing the credit. As always, check with your tax advisor on how you can best utilize this tax credit. The law also includes a property tax exemption, so that if a geothermal system increases a home’s assessed value, the owners won’t pay taxes on that added amount for 10 years.