Federal tax credits are available for residential geothermal heat pump system installations, and have been renewed through 2032! The federal tax credit for residential geothermal heat pump installations is 30% through 2032, and will be stepped down after that.
A tax credit is $1.00 credit for $1.00 owed (whereas a deduction just removes a percentage of the tax owed). The tax credit can be carried over from year to year if it is not all used within the same year it is credited.
In order to qualify for the tax credit, the geothermal heat pump must meet or exceed the Energy Star Program requirements (for example EER and COP) that were effective when the geothermal heat pump was installed. You can claim everything that it cost you to upgrade your heating and cooling system to the geothermal heat pump system - the cost of the geothermal heat pump, the earth loop piping, all of the parts and materials for the system, all of the digging costs (if you pay to have it done), and any labor you have to pay to have it installed.
You may also be eligible for state or local tax credits for your geothermal heat pump installation. Geojerry may be able to help you with the paperwork for state or local credits. Also, be sure to check with your local electric utility company to see if they offer any rebates for installing a geothermal heat pump.
We have had many Do-It-Yourself geothermal customers receive their federal, state, and local tax credits, without any problems from doing the installation themselves.