South Carolina Geothermal Tax Credit Signed Into Law

Homeowners in South Carolina are now able to claim a 25% tax credit for installation of geothermal heating and cooling equipment. The geothermal tax credit goes into effect this year (2016) and is good for three years.

South Carolina Governor Nikki Haley signed the tax credit into law on February 16, 2016, but it is retroactive to January 1, 2016. That means any residential geothermal installations in South Carolina during 2016, 2017 and 2018 will qualify for the credit.

South Carolina Geothermal Tax Credit Details

  • 25% tax credit for residential geothermal heating and cooling equipment (geothermal heat pump), including installation costs.
  • Tax credit cannot be collected until installation is complete.
  • Installation must be in South Carolina and owned by the taxpayer claiming the credit
  • The credit cannot exceed $3,500 for each residential property or 50% of the taxpayers total tax liability for any one tax year.
  • If the credit exceeds $3,500, the remaining amount can be carried over to the next tax year for up to 10 years.
  • To claim the tax credit, the geothermal system must be installed by December 31, 2018.

Other Important Details of the SC Geothermal Tax Credit

The South Carolina Geothermal Tax Credit is very similar to the North Carolina tax credit that was in place until the end of 2015, except South Carolina has not placed a maximum cap on the total tax credit. You will be able to claim the full 25% of the cost of the South Carolina installation. However, you may not be able to claim the entire tax credit in one year because of the $3,500 annual cap on the credit.

This tax credit makes 2016 the best opportunity for South Carolina residents to save on installation of geothermal heating and cooling systems. The Federal Geothermal Tax Credit is scheduled to expire at the end of the year. Unless there is an extension, 2016 will be the only year you will be able to claim both the South Carolina Tax Credit and the 30% Federal Tax Credit.

For additional information about Geothermal Tax Credits, please visit our Geothermal Tax Credit Page

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