Please note: The information in this post is current as of 2025. Check federal guidelines for any updates.
Many Central Indiana homeowners are searching for clear answers to this question: Is the 30 percent geothermal tax credit still available for a new geothermal system?
Yes. The credit is still active. But the deadline has changed, and time is now very limited.
With the passage of the “One Big Beautiful Bill” in July 2025, the geothermal tax credit now expires on December 31, 2025. Your system must be installed and placed in service by that date to qualify. With approximately one month left, you should assess your options as quickly as possible.
Options to Take Advantage of Expiring Tax Credits
Homeowners generally fall into one of three scenarios. Each has different options for qualifying before the deadline.
1. You already have a geothermal loop field.
If your home already has a loop field installed, you may still be able to capture the tax credit. Replacing an aging or failing geothermal unit is often the most realistic option this late in the year. In many cases, the existing loop is healthy or needs only minor repairs. Installing a new high efficiency geothermal unit can often be completed within the remaining timeline.
This path offers a strong chance of meeting the December 31 deadline because the most time-intensive step, the loop field, is already in place.
2. You do not have a loop field, but your property allows fast installation.
A full geothermal installation is still possible in some situations. This depends on several variables. Permitting speed. Loop design complexity. Soil and drilling conditions. Crew availability. Site accessibility. If each step moves quickly and the property is straightforward, there may be enough time to complete the entire project.
These cases are less common with the deadline approaching, so the key is to confirm feasibility immediately. If a full installation is possible, your contractor must secure drilling and installation windows right away.
3. You have geothermal but want to replace it with another high-efficiency system.
If your home cannot complete the loop installation and commissioning before the deadline, you still have a strong alternative. A qualifying high-efficiency air source heat pump or dual fuel system may provide a practical solution with a shorter installation timeline. The tax credit for these systems, up to two thousand dollars, also expires on December 31, 2025.
This option restores comfort quickly, improves efficiency, and still allows you to benefit from federal incentives even if geothermal is not achievable at the moment.
How the Geothermal Federal Tax Credit Works
The federal geothermal tax credit is part of the Residential Clean Energy Credit. It provides a 30 percent tax credit for qualified geothermal installations. To qualify, the system must meet federal performance standards and serve a home you own. Eligible costs include:
- The geothermal heat pump
- The loop field
- Piping and wiring
- Professional labor for installation and commissioning
The credit applies to the tax year when the system is placed in service.
How much could that save? To make the math easy, here’s an example: if your geothermal project totals thirty thousand dollars, the credit equals nine thousand dollars. Keep your proposals, invoices, and commissioning documents for filing.
Benefits of Geothermal Tax Credit
The geothermal tax credit removes a significant portion of the upfront cost. For many homeowners, this is the difference between geothermal being a long-term investment they can afford or one they delay for several more years. The credit covers 30 percent of qualified installation costs, which often lowers total project expenses by several thousand dollars. Losing that credit means future geothermal projects become noticeably more expensive.
Your Next Steps With Indiana’s Geothermal Leader
Precision Comfort Systems designs, installs, and services geothermal heating and cooling systems across Greater Indianapolis and Central Indiana. Our team includes Indiana’s most experienced geothermal specialists, and we navigate the complexity to keep the process smooth and swift. We size correctly, engineer the loop field, manage permits and drilling, and commission the system to perform from day one and run reliably for decades.
Schedule your geothermal evaluation now to meet the December 31 deadline for 30 percent federal tax credits on your installation costs. We’ll confirm your options, outline total expenses and credits, and hold an installation window that protects your eligibility for the geothermal tax credit ending in 2025.
Not sure if geothermal fits your property, budget, or timeline right now? Let’s compare a high-efficiency heat pump or dual-fuel system side-by-side with geothermal. We’ll show you the energy benefits, incentives in 2025, and a clear path to long-term comfort so you can make a confident decision before the window closes.