Geothermal Tax Credits - A Tremendous Opportunity for Homeowners

renewable energy tax credit

An 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 offers a one-time 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.

To 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 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 the EnergyStar program currently in effect."

The tax credits are available through December 31, 2016. Consult your local tax professional for advice on taking advantage of this tax credit, as this announcement is not intended as a recommendation or endorsement of any financial strategy.

Download the brochure: Understanding the Federal Tax Incentives

Helpful Resources
- Excerpt from the Energy Improvement and Extension Act pertaining to geothermal
- IRS Form 5695: Residential Energy Efficient Property Credit
- More information about the "Residential Renewable Energy Tax Credit"

Please consult with your tax professional for details.

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Call Mike Walton today at (989) 772-4822 for your free consultation and to learn more about how you can take advantage of the 30% renewable energy tax credit.