Fed cred

Don’t overlook federal credits that cover some installation costs

Posted on Sep 01 2019 in Heartland REMC

We spend a lot of time talking with our members about rebates that are available through not only Heartland REMC, but also the Power Moves program of our power supplier, Wabash Valley Power Alliance. 

These rebates are great, and Heartland REMC is thankful we can provide incentives for updating your HVAC systems to become more energy efficient. 

But don’t overlook incentives from Uncle Sam. Depending on what type of HVAC system you are installing in your home, there may be a federal tax credit to go along with the rebates we provide. 

If geothermal is on the list of options for your next heating and cooling system, you need to review what the federal government has available and what that tax credit will look like over the next two to three years. That’s where Heartland REMC comes in. We stay on top of available rebates and incentives as they change each year. The current tax year — 2019 — has been a good year for incentives. 

For 2019, there is a 30% federal tax credit available for a geothermal system installation in your home. That essentially means Uncle Sam is going to cover almost a third of the cost of the qualified geothermal system in the form of a credit when you pay your 2019 taxes next year. One caveat: To receive the full 30% credit, your total federal tax bill must be equal to or greater than the credit amount. So even if your federal tax bill is less than the full 30% credit, the credit you will receive will cover the federal taxes you owe. 

It is important to understand how this credit will be changing over the next two years. In 2020, the tax credit will drop from 30% to 26%. The following year, in 2021, it will fall to 22%. By the start of year 2022, if nothing changes at the federal level, the tax credit will go away completely. 

Therefore, I encourage you to talk with your tax professionals during your decision process. They will be able to get you the proper documents when your situation requires it. 

As a reminder: we provide rebate opportunities for our members who are installing a geothermal or an air source heat pump, a heat pump water heater or a 50-gallon electric water heaters, and a variable speed pool pump. For more information on all rebate requirements, please visit Heartland REMC’s website or contact me, Garrett Keiser, your Heartland REMC energy advisor.