In 2022, the Inflation Reduction Act amended the tax code of sections 25D and 48 for qualifying commercial and residential geothermal installations to receive tax credits up to 30%-50% of cost with additional incentives.

The 30% credit of total geothermal heat pump cost extends through the year 2032 and declines to 26% in 2033, and 22% in 2034. All geothermal projects started within the 2022 tax year and after may qualify. Commercial projects may qualify for an additional 10% for domestic content and another 10% bonus for building within energy communities.