Federal Tax Credit for Geothermal

Geothermal heating and cooling systems qualify for a recently implemented federal tax credit allowing homeowners to deduct a significant portion of the total geothermal system installed cost from their federal tax liability or tax due. In August 2022, the federal tax credit for geothermal system installations was extended and can be retroactively applied to installations "placed in service" on January 1, 2022 or later. Residential credits increased to 30% of the total installation cost (less ductwork) through 2032, stepping down to 26% in 2033, and 22% in 2034. Contact Comfortworks to learn more about the incentives of geothermal systems.

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Claiming Your Credit

IRS Form 5695 is used to claim the Residential Energy Credit.​


Geothermal systems are the most energy-efficient and environmentally friendly HVAC systems available

Geothermal technology uses a series of sealed piping loops buried in the ground that tap the renewable solar energy of the ground. These loops create a better heat transfer medium than traditional air source systems. It is so efficient that the U.S. Environmental Protection Agency has stated:​

"Geo exchange systems are the most energy-efficient, environmentally clean and cost-effective space conditioning system available today"

According to data supplied by the U.S. Department of Energy (DOE) Office of Geothermal Technologies, nearly 40% of all U.S. emissions of carbon dioxide (CO2) are the result of using energy to heat, cool and provide hot water for buildings. This is about the same amount of CO2 contributed by the transportation sector. Over twenty years, the carbon footprint reduction would be equivalent to planting 120,000 acres of trees or converting over 58,000 cars to zero emission vehicles. In most areas of the United States, geothermal systems had the lowest CO2 emissions and the lowest overall environmental impact of any space conditioning technology evaluated by the EPA.