Energy Tax Credit

Geothermal Tax Credit at a Glance

An exciting new tax credit is now available for those building new homes that install geothermal heating and cooling systems through the Energy Improvement and Extension Act of 2008 (H.R. 1424). H.R. 1424 offers a one-time tax credit of 30% of the total investment for all residential ground loop or ground water geothermal heat pump installations.

To qualify, the systems must meet or exceed EnergyStar requirements and be installed after December 31, 2007. 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 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."

The 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 strategy.

Helpful Resources

• More Information about the "Residential Renewable Energy Tax Credit"
• Find additional tax incentives that may be available in your state - www.dsireusa.org
• Visit www.climatemaster.com for complete geothermal information.