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Colorado State Heat Pump Tax Credit Filing Instructions

Does Colorado have a rebate for heat pumps? No – but we do have a new Colorado State tax credit for heat pumps and heat pump water heaters that 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:

What is the Colorado energy tax credit for 2024? Simply fill out Form DR 1322 to take advantage of your 2023 heat pump install. This must accompany the building owner’s Colorado income tax return. This is how you will receive the Colorado heat pump tax credit. 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 (do not include labor 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!! You know that heat pumps are a good option for Colorado residents, and we couldn’t be where we are without wonderful customers like yourselves. We’re here for you – before, during, and after your Climate-Friendly Home upgrade.

Do heat pumps qualify for federal tax credit? Yes! Check out our guide here.

Stay Cool and Save Big: Why You Should Replace Your Old AC with a Heat Pump

Summer is in the air, and if you’re feeling the heat, it may be because that clunky, old air conditioner just isn’t cutting it anymore. It’s time for an upgrade, but choosing the right replacement is crucial. Opting for the wrong system can result in hundreds or even thousands of dollars in wasted expenses each year, and choosing the right one can cut your cooling costs in half. Worried you’ll get it wrong? No sweat! Elephant Energy is here to support you, and we highly recommend considering heat pumps.

Continue reading “Stay Cool and Save Big: Why You Should Replace Your Old AC with a Heat Pump”

Ultimate Guide to Mini Split Heat Pumps

Here at Elephant, we love heat pumps! And can you blame us? They help the planet, save money, and heat and cool your home WAY more efficiently than anything else on the market. All heat pumps are great, but different types of heat pumps bring different things to the table. Mini Split heat pumps are a particularly handy solution for certain homes – especially those without ducts. Wondering if mini splits are right for your home? That’s why we’re sharing our Ultimate Guide to Mini Split Heat Pumps.

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Ultimate Guide to Cold Climate, Air Source Heat Pumps

Here at Elephant Energy, we consider ourselves cold-weather heat pump experts. Our small-but-mighty Boulder-Denver based team has installed the best cold climate heat pumps in hundreds of homes in Colorado and Massachusetts. With our customers encountering some of the coldest temperatures in the U.S., our installs have proven that heat pumps work (really well!) in cold climates. Plus, heat pumps are the most sustainable, cost-effective, comfortable way to heat and cool your home. That’s why we’re sharing our Ultimate Guide to Cold Climate Heat Pumps with everything you need to know about this awesome technology. Especially if you are considering upgrading your own home to include one.

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