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Colorado State Heat Pump Tax Credit Filing Instructions

A new Colorado State tax credit for heat pumps and heat pump water heaters went into effect on January 1, 2023. This guide is only for heat pumps installed in the state of Colorado in 2023.

  • The tax credit is an income tax reduction based on 10% of the price of the equipment, not including installation charges. 
  • The 10% tax credit also extends to electrical panel upgrades (if needed for the heat pump or heat pump water heater installation) and energy storage systems.
  • Inclusive Definition: “Building owners” encompass lessees with lessor-approved installations.

How to Claim / File for the Income Tax Credit:

Fill out Form DR 1322. This must accompany the building owner’s Colorado income tax return. Instructions below.
Note: If you are an Elephant Energy customer, download and use this Form DR 1322 as it is signed by us.

Disclaimer: While we provide guidance, it’s crucial to seek advice from a tax professional regarding individual tax situations. Our presentation doesn’t assume liability for your specific tax circumstances.

  1. PART 1 – Eligibility Certification
    • Building Owner Information: Fill in your name, Social Security number, and address. Include your spouse’s details only if filing jointly. If the building owner is a business, provide its name and Federal Employer Identification number.
      Screenshot of tax form for building owner information
    • Contractor: 
      1. Business Name: Elephant Energy, Inc.
      2. FEIN: 61-1992874
      3. Mailing Address: 1390 Yellow Pine Avenue
      4. City: Boulder
      5. State & Zip Code: CO 80304
        Contractor information on a tax form
    • Line 1 Installation Address and Date: List the street address of the building where the heat pump or heat pump water heater was installed.
      Installation address and date
    • Line 2 Purchase Type, Building Type, and Installation Standard 
      1. For purchase type, select the relevant purchase made from one of the highlighted products that Elephant Energy supplies below (with star).
      2. For building type, choose “Residential”.
      3. For Installation Standard, check “Licensed Contractor with Specialized Technicians”
    • Line 3 Purchase Information: provide the purchase date, serial numbers of the main components of the heat pump or water heater, along with their make and model details. This information is in your invoice from Elephant Energy.
    • Line 4 Certification of System Requirements and Installation Standards: Elephant Energy can confirm that its installations meet all 6 criteria.
      Purchase information tax form for energy creditPurchase Information
    • Line 5 Amount of Income Tax Credit
      1. On Line 5a, input the equipment-only cost. Please refer to your invoice for this breakdown.
      2. On Line 5b, calculate your heat pump system or water heater credit by multiplying the amount from Line 5a by 10% (0.10). This resulting figure represents your eligible credit. If you’re not assigning the credit, transfer this amount to the appropriate credit schedule (DR 0104CR, DR 0106CR, or DR 0112CR).
        Amount of Income Tax Credit
  1. PART 2 – Contractor Certification Sales Tax Exemption – Elephant Energy installations have already taken the sales tax exemption so there is nothing for you to do here.
  2. PART 3 – Election Statement for Assignment of Income Tax Credit – Elephant Energy systems are not eligible for assignment back to Elephant Energy.

And once again, thank you for being a part of the Elephant Energy Herd!! We couldn’t be where we are without wonderful customers like yourselves. And in return, we’re here for you – before, during, and after your Climate-Friendly Home Upgrade.