Geothermal heat pumps are eligible for the Residential Clean Energy Credit. This credit covers up to 30% of the costs of qualifying home improvements. The credit applies to new, qualified geothermal heat pump installations for your home, installed anytime from 2022 through 2032. The credit percentage rate phases down to 26% for property placed in service in 2033 and 22% for property placed in service in 2034. Qualified expenses include the costs of new geothermal heat pump property, including labor costs for installation.