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State of Colorado Heat Pump Tax Credit

For income tax years beginning on or after January 1, 2023, but before January 1, 2025, any purchaser of an air-source heat pump system, ground-source heat pump system, water-source heat pump system, or variable refrigerant flow heat pump system (heat pump system) or a heat pump water heater that installs a residential or commercial heat pump system or a residential or commercial heat pump water heater into real property in the state is allowed an income tax credit in an amount equal to 10% of the purchase price of the heat pump system or heat pump water heater.

Eligibility: 

To be eligible for the sales and use tax exemption under certain circumstances, the purchaser of the heat pump system or heat pump water heater is required to certify that all necessary mechanical, plumbing, and electrical work performed in connection with the installation of the heat pump system or heat pump water heater will be performed by a certified contractor on a certified contractor list created pursuant to current law or by employees of a utility, subject to state licensing requirements and all applicable state and local rules, codes, and standards.

Funding Entity: 
State of Colorado
Source: 
State
Category: 
Tax Credit
Eligible Project Type: 
New Construction
Rehabilitation
Amount: 
10% of the installed cost.
Time Available: 
Income tax years beginning on or after January 1, 2023, but before January 1, 2025
Notes: 
This program is scheduled to be updated in January 2024.
Purpose of Funds: 
Heat pump general
Heat pump water heater
Utility and electric upgrades
Other
Last Updated: 
09/13/2023
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