You’ll often see the phrase ‘there has never been a better time to act than now’. From back to school shopping, to buying a new car, ‘act now before it is too late’ messages are all too frequent. But we can honestly say, if you’ve been thinking about upgrading your home’s heating and cooling system to geothermal, of if you have an aging geothermal system that you love that is starting to show its age, you NEED to be aware of the December 31st, 2025 deadline. After this date, should you choose to replace your equipment for a newer model, you will essentially be paying 30% more for the exact same equipment.
What is the Geothermal Tax Credit?
The Residential Clean Energy Tax Credit currently allows homeowners to deduct 30% of the total cost of a qualifying geothermal heating and cooling system from their federal taxes. Unlike other efficiency upgrades that carry maximum limits, geothermal has no dollar cap. That means whether your system costs $15,000 or $40,000, you can claim the full 30% of your investment.
The credit covers more than just the equipment. Labor for installation, wiring, piping, and site preparation all qualify, provided the system meets ENERGY STAR® requirements at the time of installation. The home must be located in the U.S. and used as a residence, but it does not need to be your primary residence, you can even claim the credit on multiple homes if you install geothermal in more than one property.
When is it Expiring?
The 30% geothermal tax credit is set to expire on December 31, 2025. To qualify, your new geothermal system must be installed and in service by that date. Beginning in 2026, this credit will no longer be available, and there is no indication it will return anytime soon.
That means waiting could cost you significantly. For example, a $30,000 system installed in 2025 qualifies for a $9,000 federal tax credit. Delay until 2026, and you’re paying the full price with no rebate.
What This Means for Homeowners
If your current geothermal system is showing signs of age, or if you’ve been on the fence about making the switch, this is the moment to act. By moving forward before the deadline, you’ll:
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Save 30% off the cost of your new geothermal system.
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Potentially combine savings with local utility rebates and other incentives (several of which are also going away in 2025).
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Lock in a system that delivers long-term efficiency, comfort, and peace of mind under a new warranty.
Don’t Just Take Our Word For It
The IRS provides full details about the program, eligibility requirements, and how to claim the credit on your tax return. You can review them here:
👉 IRS – Residential Clean Energy Credit
Ready For A Quote?
At Kingdom Air, we proudly install WaterFurnace geothermal systems, made right here in Indiana, offering the latest in comfort and energy efficiency. Our project manager can walk you through the full savings picture, including tax credits, rebates, and various financing options to help you decide if replacing now makes more sense than waiting.
Time is running out. Don’t miss your chance to save thousands before the 30% tax credit disappears.
📞 Call us today at 812-486-3840 to schedule your free consultation.
