Geothermal Tax Credits are available for newly installed systems. Since these are tax credits, rather than deductions, they save you full dollars, rather than just a percentage of a dollar. When comparing installation or replacement of regular air-to-air HVAC systems to geothermal, don’t forget to keep in mind that tax credits can make up a good portion of the upfront cost of the geothermal system.
30% Federal Geothermal Tax Credit
The 30% Federal tax credit was reinstated in February 2018. Energy Star certified Geothermal heating and cooling system installations in U.S. homes qualify for a 30% Federal income tax credit through 2019. After that, the tax credit shrinks to 26% for 2020 and 22% for 2021 . There is no cap to the credit and it can be carried forward into future years. The home does not have to be the taxpayers principal residence. For more information about the Renewable Energy Tax Credit, visit the Energy Star Website.
South Carolina Tax Credit – Expired
A 25% South Carolina Income Tax Credit expired on December 31, 2018.
North Carolina State Geothermal Tax Credit – Expired
The North Carolina Renewable Energy Tax Credit expired at the end of 2015. No additional state tax credit is currently in place.
For more on state tax credits, visit Database of State Incentives for Renewable Energy