Tax Credit for Geothermal and Solar
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exciting new tax credit is now available for home and
commercial building owners who install geothermal heating
and cooling systems through the Energy Improvement and
Extension Act of 2008 (H.R. 1424). H.R. 1424 offers
a onetime tax credit of 30% of the total investment
for homeowners who install residential ground loop or
ground water geothermal heat pumps.. A credit of 10%
of the total investment is also available (no maximum)
for a commercial system installation.
qualify, the systems must meet or exceed EnergyStar
requirements and be installed after December 31, 2007.
While units installed in 2008 are subject to a $2,000
cap on the credit, units installed from 2009 through
2016 can take advantage of the full credit. Owners can
file for the credit by completing the Renewable Energy
Credits subsection on their tax return forms for 2008.
For taxpayers that are subject to the Alternative Minimum
Tax, they can claim the credit on their taxes for the
following year. No proof of purchase will be required;
however, in case of an audit, owners are encouraged
to keep a detailed invoice of their purchase on file.
The contractor who sold and installed the product should
list the purchase as a "Geothermal Heat Pump"
on the invoice and that it "Exceeds requirements
of Energy Star program currently in effect".
tax credit is available through December 31, 2016. Consult
your local tax professional for advice on taking advantage
of the tax credit, as this announcement is not intended
as a recommendation or endorsement of any financial
- Excerpt from the Energy Improvement and Extension
Act pertaining to geothermal.
- IRS Form 5695*: Residential Energy Efficient Property
- More Information about the "Residential Renewable
Energy Tax Credit"
- Find additional tax incentives that may be available
in your state - www.dsireusa.org
your tax professional for details.