Updated: Jul 5, 2021
No need to overthink this tax credit. It is a Federal incentive to move away from fossil fuel energy sources to green energy sources. Residential geothermal projects -retro-fit, heat pump swap outs and new builds- all qualify for the tax credit.
This is an incredible advantage to homeowners and reduces the the overall cost of installing a geothermal system by 26%. For instance, if your geo project proposal is $40,000 you would receive $10,400 in tax credits reducing your overall "out-of-pocket" cost to $29,600.
For new home construction this makes real "cents" as you need to consider some type of heating and cooling system. The benefits and savings can be substantial to install geothermal for any new build. And remember, geothermal systems heat AND cool your home. Geothermal can also run your hot water.
If you have an existing oil or fossil fuel system and are switching to geothermal the 26% tax also applies to you. In addition retro-fit homeowners can claim a rebate with the program Energize Connecticut. The rebate is up to $1500 per ton. For instance if your geo project proposal contains a 4-ton heat pump and total cost is $40,000, you would receive $10,400 in tax credits PLUS an additional $6,000 in rebates reducing your overall "out-of-pocket" cost to $23,600.
How do you claim your tax credit?
When completing your taxes for the year of your install complete IRS Form 5695
How do you claim your rebate?
King Energy, we help you do it. We guide you through the form process to ensure the information is correct
Further Sources & Articles Pertaining to the Federal Tax Credit Last-minute stimulus deal in US extends clean energy tax credits