Geothermal Heat Pump Installation: How to Claim Tax Credits

A geothermal heat pump is considered one of the most energy-efficient HVAC units on the market. It harnesses heat underneath the ground and uses the resulting energy to produce warm air, cool air and hot water.

Many heating and air experts would agree that a geothermal heat pump could work as the sole equipment for regulating your home’s indoor climate. The earth maintains a practically constant temperature of 54°F 10 feet down, which means you would have an endless source of heating in the winter and cooling in the summer year after year.

Furthermore, investing in a geothermal heat pump, especially in 2019, provides you with the chance to receive a federal tax credit. Whether the unit is placed in your primary residence or a secondary home, you can claim 30% of the cost (equipment and installation) on your taxes. This program does not expire until December 31, 2021, but the credit value goes down to 26% and 22% in 2020 and 2021, respectively.

To ensure that you can successfully take advantage of this tax credit, don’t forget to do the following:

Consult a Certified Public Accountant

Claim your tax credit using the Internal Revenue Service Form 5695, which is downloadable through the government agency’s website. However, it pays to consult a tax professional to learn of possible updates to this program, which will help you avoid any mistakes in your filing.

Save Project Documents

Keep all of your receipts on file. The Manufacturer’s Certification Statement is another important document to save for your records. This is proof the manufacturer certifies that their product qualifies for the tax credit. You don’t need to submit a copy of any of these documents with your tax return, though. Just make sure that you have them on hand. 

Explore ENERGY STAR®-Labeled Reno Heating and Air Products

As the local authority on heating and air, turn to Sierra Air to find out whether your house is a good candidate for a geothermal heat pump. Call us at (775) 800-5500 now to arrange an appointment.