For several years, installing geothermal heating and cooling systems in residences provided a bonus: Homeowners received a 30 percent federal geothermal tax credit, along with an Iowa tax credit totaling 20 percent of the federal credit.
Congress did not extend the federal tax credit past 2016. With the end of the federal credit, the Iowa credit tied to the federal amount ended, too.
However, in the final days of the Iowa Legislature’s 2016 session, the legislative body passed a new geothermal incentive: a 10 percent standalone Iowa tax credit for installing residential geothermal. So if you are considering a geo installation, this incentive is now available to you. As with any tax issue, you should consult with your accountant or tax advisor to determine your potential tax savings.
Note that if Congress should reauthorize the 30 percent credit or pass new legislation for a federal tax credit at a different rate, the Iowa tax credit would revert to 20 percent of the federal tax incentive.
Rick Rockacy, president of the Iowa Geothermal Association, recommends these resources for learning more about the value of geothermal:
In addition, check out our Build It Right video on geothermal