The only HVAC tax credits for 2019 are for geothermal heating and air conditioning.
There are no tax credits for efficient HVAC equipment other than geothermal. The credits for efficient equipment ran out at the end of 2016 and were not renewed in the Bipartisan Budget Act of 2018.
Geothermal Heat Pump Tax Credits
The name of the program that geothermal fits into is the Residential Renewable Energy Tax Credit.
[Horizontal Loop System]
[Vertical Loop System]
[Open Loop System with Wells]
Equipment types qualifying for the federal tax credits are:
- Geothermal Heat Pumps
- Solar Water Heat
- Solar Photovoltaics
- Wind (Small)
- Fuel Cells using Renewable Fuels
These HVAC federal tax credits for 2019 FAQs provide the pertinent information.
How much are the Federal tax credits for 2019?
The credit for 2019 is 30% of the cost of the geothermal or other qualifying system.
How long does the program last?
The program is set to expire at the end of 2022.
Is the credit the same every year?
No. It is a step-down program. Here are the percentages through the end of the Federal geothermal heat pump tax credit program:
- 30% for systems placed in service by 12/31/2019
- 26% for systems placed in service after 12/31/2019 and before 01/01/2021
- 22% for systems placed in service after 12/31/2020 and before 01/01/2022
What is the maximum amount that can be saved?
There is no maximum. This year, you will receive a tax credit for whatever you spend on the geothermal, solar, small wind or renewable fuel cell technology.
How much do geothermal heat pump systems cost?
They start at about $8,500 for a small system with a horizontal, closed loop.
The most expensive systems cost more than $25,000 and use deep vertical wells.
The average cost of geothermal systems is about $18,000.
On an $18K system, the homeowner’s 30% tax credit would be $5,400. Keep in mind that this is not a deduction – a credit reduces the tax burden by that amount.
Where can information about the Residential Renewable Energy Tax Credit be found?
This page has information about the program and details about each type of qualifying equipment.
Is there an IRS form to file?
Yes. Here is a link to IRS form 5695 for tax year 2018.
Here is a link to the instructions for Form 5695.