Question

is fully replacing a failed geothermal pump considered an improvement eligible for tax credit?

Forum|Forum|1 year ago
July 5, 2024
1 reply
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One of my 3 geothermal heat pump/condenser units has failed. Original installation was in 2011, in my primary residence. I'm evaluating whether to fully replace it with a new, 2024 model, or spend about half that cost to repair it. My current situation is I have two heat pumps operable. If I either replace the third unit, or repair it, is either ( or both?) considered an improvement from my current situation, whereby I choose again to go geothermal? And therefore make me eligible for the 30% tax credit?

Thanks

Not A Product Question

A

AmeliesUncle

I can't think of any reason why a new one wouldn't qualify for the credit.

No, a repair would not qualify for the credit.

E

Eric-tdAuthor

actually I have found that the key to getting the tax credit is to replace the entire geothermal operating system, meaning condenser unit + air handler.

O

Opus 17

Employee

@Eric-td wrote:

actually I have found that the key to getting the tax credit is to replace the entire geothermal operating system, meaning condenser unit + air handler.

There is no such limitation in the actual law. See section 25D, paragraph (d)(5) for the definition of qualifying heat pump property.

https://www.law.cornell.edu/uscode/text/26/25D

I agree a repair does not qualify, but there is nothing in the law that says that replacement of part of a system doesn't count.

There could be a regulation or FAQ that says you can only get credit for an entire system, but when the regulations or instructions conflict with the Law, the law is always primary.

If you found something on the IRS web site that it must be an entire system, I would like the link to see for myself. If you found advice on a non-IRS web site, I would not consider it to be authoritative. Many energy savings sites get the law wrong.