Geothermal Tax Credits for New Jersey Residents

Looking to save big time on the installation of that geothermal heating and cooling system you’ve always longed for? Well, this could be the time!

The Bipartisan Budget Act of 2018, signed into law in February 2018, reinstates the Residential Energy Efficient Property Credit for fuel cells, small wind systems … and geothermal heat pumps. Relative to the latter:

  • This credit will stay in effect from now through December 31, 2021.
  • It covers 30% of allotted expenditures for systems placed in service between now and December 31, 2019.
  • A gradual reduction in credit value is slated for each subsequent year, so if you’d like the complete 30% credit, you’ll have to take action swiftly.
  • Retrofit systems are accepted as “placed in service” when they’re fully installed and ready for use.
  • Systems for newly constru|ere]36]cted or newly renovated homes are judged “placed in service” on the date you, the homeowner, take occupancy of the home.
  • It’s not necessary that this home be your primary place of residence.
  • Your geothermal heat pump must meet federal ENERGY STAR recommendations.
  • To claim the Residential Energy Efficient Property Credit, you must complete and file IRS Form 5695.

For additional details, review our blog as well as this WaterFurnace®-created circular, Understanding the Federal Incentives for Geothermal Heat Pumps.

Though it’s obvious that we at Energy Smarts Mechanical would love to see you install a geothermal heating and cooling system for your New Jersey home, we cannot legally suggest any financial strategy for doing so. We can, however, recommend that you seek the services of an area tax professional. He or she can direct you on how best to take advantage of geothermal tax credits considering your individual financial situation.

If you’re eager to learn more about what other energy-related tax incentives might be available to you at the federal, state, and local levels, check out dsireusa.org. This is a one-of-a-kind resource that offers state-by-state information on scores of policies and incentives designed to advance  renewable energy and energy efficiency.

And don’t forget: When you’re ready to install a geothermal heating and cooling system in your home, go with the New Jersey geothermal pros at Energy Smarts Mechanical. We’ll do the job right – to help you start saving both energy and money right from the start.