Colorado Heat Pump Tax Credit

2026 tax credit amounts (installs on or after 2026-01-01): $1,000 air-source heat pump, $2,000 ground-source / water-source / combined-source heat pump, $250 heat pump water heater. The credit is claimed by the REGISTERED INSTALLING CONTRACTOR (registration with the Colorado Department of Revenue required), who must pass at least one third through to the customer as an itemized "State of Colorado Heat Pump Discount" ($333 / $667 / $83 minimum discounts). Non-residential installs earn one credit per 4 tons of installed capacity; multifamily earns one credit per unit served. Amounts step down again in tax year 2029; the statute runs through 2032. 2024-2025 installs used the higher expired tiers ($1,500 / $3,000 / $500).

Colorado offers tax credits for various heat pump technologies, including air-source, ground-source, water-source, and heat pump water heaters, with specific eligibility and discount requirements.