Geothermal Tax Credits in Paducah, KY

An exciting new tax credit is now available for home and commercial building owners who install geothermal heating and cooling systems in Paducah, Kentucky through the Energy Improvement and Extension Act of 2008 (H.R. 1424). H.R. 1424 offers a one time tax credit of 30% of the total investment for homeowners who install residential ground loop or ground water geothermal heat pumps. A credit of 10% of the total investment is also available (no maximum) for a commercial system installation.

Geothermal Tax Credits

In February 2018, the 30% geothermal federal tax credit was reinstated through 2019 and can be retroactively applied to installations “placed in service” on January 1, 2017 or later. Property is usually considered to be placed in service when installation is complete and equipment is ready for use. However, if the system is part of the construction or renovation of a house, it’s considered placed in service when the taxpayer takes residence in the house. To save the most on your installation, you’ll want to act quickly—this credit is set to decrease each year through 2021 with the amount dropping to 26% in 2020 and 22% in 2021.

• 30% of total system cost through 2019

• 26% of total system cost in 2020

• 22% of total system cost in 2021

• No limit to credit amount

• Can be used to offset AMT tax

• Can be used in more than one year

• Can be combined with solar and wind tax credits

• Can be combined with energy efficiency upgrade credits

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