30% Federal Tax Credit on Residential GeoThermal Heat Pumps (2025)

Saving Americans Money on Renewable Energy Improvements

What is the Tax Credit?1

The Residential Clean Energy Tax Credit covers 30% of the total system cost, including installation, of GeoThermal heat pumps meeting the requirements of the ENERGY STAR program. Under the One Big Beautiful Bill Act (OBBA) passed in July 2025, the new GeoThermal system must be placed in service by December 31, 2025. The 30% tax credit may also be retroactively applied to GeoThermal systems placed in service on January 1, 2022 or later.

30% Federal Tax Credit on GeoThermal HVAC Systems Through 2025

Residential Tax Credit

You’ll want to act soon to save the most on Your GeoThermal installation. The 30% tax credit will expire December 31, 2025.

% Tax Credit
for property placed in service after December 31, 2021
and by December 31, 2025

What equipment qualifies for the residential tax credit?

  • The tax credit applies only to new “qualified geothermal heat pump property”.
  • Qualified geothermal heat pump property: (1) uses the ground or ground water as a thermal energy source (to heat), or as a thermal energy sink (to cool) a home, and (2) is ENERGY STAR certified.
  • Qualified geothermal heat pump property expenditure: An expenditure for qualified geothermal heat pump property installed on or in connection with the taxpayer’s residence.
  • The GeoThermal heat pump must be installed in a home you own and use as a residence. Existing homes and new construction qualify for the tax credit. Both principal residences and second homes qualify. Rentals do not qualify

Efficiency Requirements

To be eligible for the tax credit, GeoThermal systems must meet the following ENERGY STAR efficiency requirements:

Water-to-AirWater-to-WaterDirect Expansion
Closed Loop:
EER* >= 17.1
COP** >= 3.6		Closed Loop:
EER >= 16.1
COP >= 3.1		EER >= 16
COP >= 3.6
Open Loop:
EER >= 21.1
COP >= 4.1		Open Loop:
EER >= 20.1
COP >= 3.5

How Do I Apply?1

To claim residential tax credit, fill out IRS Form 5695 and file it with your tax returns. You can get the  2025 Form 5695 here. If you have already filed your return, you will need to file an amended return (Form 1040X) to claim these credits. Save your receipts and the Manufacturer’s Certification Statement2 for your records. Please contact the IRS directly, or talk to your tax professional, with questions on how to file. Also, please refer to ENERGY STAR’s resource: Changes to requirements for claiming the Energy Efficient Home Improvement Tax Credit in 2025

Commercial GeoThermal AC Tax Credit Up to 30% with Bonus (6% base rate) + other incentives available

Commercial Tax Credit

Although federal GeoThermal HVAC tax credits for residential properties have expired, there are still incentives available for commercial properties. Learn more about the commercial GeoThermal AC tax credits, below.

Commercial GeoThremal AC TaX Credits

GeoThermal is a Smart Choice for Homes and Commercial Properties

No matter what type of property you own, we’re here to help you choose the right GeoThermal system for you. A GeoThermal heat pump (air conditioning system) has many benefits to offer you — and the 30% tax credit is just the beginning. GeoThermal heat pumps are environmentally friendly, long-lasting and can save you up to 70% on your energy bills.

Top Reasons to Choose GeoThemal AC
GeoThermal air conditioning for all types of properties - a single-family home, a mansion on the water, and a commercial office complex

Start reaping the benefits of a GeoThermal heat pump in your home.

Get a Free, Detailed Quote

Are you ready to go GeoThermal? Call Symbiont Service Corp today, fill out our contact form, or click the live chat window to your right to connect immediately with one of our friendly representatives. We’ll be glad to answer any remaining questions.

We look forward to hearing from you!

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    1 Disclaimer: The tax credit information contained within this website is provided for informational purposes only and is not intended to substitute for expert advice from a professional tax/financial planner or the Internal Revenue Service (IRS). Statements on this page are being finalized by the federal government and are subject to change and interpretation. To understand what you qualify for, please see your tax professional.

    2 A Manufacturer’s Certification Statement is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. Manufacturers should provide these Certifications on their website. Call the manufacturer, or search their website. EPA does not have copies of the Manufacturer’s Certification Statement. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return.

    Definitions:
    * COP (Coefficient Of Performance) – of a heat pump is the ratio of the change in heat at the “output” (the water reservoir of interest) to the supplied work.
    ** EER (Energy Efficient Ratio) – The higher the EER rating, the more energy efficient the equipment is. This can result in lower energy costs. This DOE site can show how to calculate potential energy costs savings of a more efficient unit.

    Sources:

    • CBS News – Cunningham, M. (August 19, 2025). Clean energy credits are set to expire. Find out how much you can claim before they end. CBS News.
    • WaterFurnace – Tax Credits & Incentives. (n.d.). WaterFurnace.
    • ENERGY STAR (EPA) – Geothermal Heat Pumps Tax Credit. (n.d.). ENERGY STAR.