The federal government offers a tax credit of up to $300 for Energy Star-rated air-source heat pumps, but it expires on Dec. 31, 2020. Qualifying geothermal heat pumps are eligible for a 26% tax credit if they're installed before Jan. 1, 2021. The tax credit declines to 22% for systems that come online between Dec. 31, 2020, and Jan. 1, 2022. Some states also offer incentives for air-source heat pumps, such as a rebate of as much as $1,500 in Maine, 0% financing and rebates in Massachusetts, and a $1,000 rebate in New York.
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