The federal tax code states that I get “A credit of 30 percent of the expenditures made by a taxpayer during the taxable year for qualified geothermal heat pumps”. The Iowa state tax code states “A geothermal heat pump tax credit is available for Individual income tax equal to 20% of the federal residential energy efficient property tax credit allowed for geothermal heat pumps provided in section 25D(a)(5) of the Internal Revenue Code for residential property located in Iowa”.
Question: If my total expenditures for the heat pump is $30,000. The federal tax credit is $30000 X .3=$9000. Is the Iowa state credit @20% of the $30,000 (total expenditures) or 20% of $9000 (just the fed allowed credit)?
