Geothermal Tax Credits
02.09.2018 The Continuing Resolution spending bill signed by President Trump in the early morning hours Friday, February 9, 2018, includes a measure to extend the tax credits for the industry-both residential and commercial. The reinstated tax credits are retroactive to January 1, 2017 and extend to December 31, 2021. A special note of consideration for commercial projects is commercial projects are eligible for the tax credit if commenced by December 31, 2021.
Qualifying geothermal heat pump models ‘placed in service’ between January 1, 2009 and December 31, 2021, are eligible for a one-time tax credit. Reduction in the tax credit percentage, under Section 48, are itemized below.
30% ~ January 1, 2017 thru December 31, 2019
26% ~ January 1, 2020 thru December 31, 2020
22% ~ January 1, 2021 thru December 31, 2021
Note: Clarifications issued by the IRS Notice 2013-70 explain that the distribution system for the home and back-up emergency heating or cooling system are not eligible for the tax credit.