On May 25, 2012, Iowa Governor Terry Branstad signed SF 2342 into law which enacted a series of Iowa tax incentives for residential geothermal incentives. Geothermal heat pumps installed on residential property in Iowa are eligible for a tax credit equal to 20% of the Federal Tax Credit. Because the federal tax credit is set at 30%, the state tax credit is equal to 6% of the system cost. Any credit in excess of the tax payer's liability may be carried forward for up to 10 years. The credit may be applied retroactively to systems installed beginning January 1, 2012. The State Tax Credit is applied for using Iowa Revenue's form used to figure Iowa Tax Credits which is contained in most tax software or familiar to your tax professional. The Iowa Tax Credit form DOES NOT require a certificate number for claiming the Iowa geothermal tax credit. SF 2342 also implemented a 10 year property tax exemption for geothermal heating and cooling systems. The Iowa Department of Revenue's property tax form can be downloaded by clicking HERE. This form is filed with your local or county assessor.
IMPORTANT! The IRS has published Internal Revenue Bulletin 2013-47 which changes IRS’ interpretation of equipment eligible for the 30% federal geothermal tax credit. The portion of the Bulletin that affects geothermal can be downloaded by clicking HERE.
Following the links below will take you to a comprehensive sources of information on state, local and federal incentives that promote energy efficiency. Please be aware that your eligibility for an incentive will depend upon meeting specific criteria and you may need to consult with your tax preparer.
**Iowa utilities may have incentives on their web sites.
The following link to a U.S. Department of Energy website also provides a useful resource that is a good
companion to the links on this page. All offer
information for the states on energy tax credits,
rebates and savings but iInformation filters provided
at http://energy.gov/savings make it easy to sort by type. Just
select “Geothermal Heat Pumps” for any state, or
select “All” for a listing of every state that has
some sort of financial assistance for geothermal
heat pump installations.