[Designie]

According to a HVAC contractor I spoke to and from what I was able to find online, there is a tax credit for installing Geothermal heating and cooling of 30% of the cost, with NO upper limit.

I know that alot of the credits are specific in their amounts and what they cover. If it's a air heat pump for instance, it would be capped at $1,500.00. Likewise for windows, water heater, etc.

The contractor told me that as of 2009, that cap came off of a few items. Those items specifically state 30%, no upper limit. Geothermal (ground source) heat pump, solar panels, wind turbines and a couple others. Obviously if it is a true 30% rebate with no limit, it is a very important factor in determining what system to install. ie a $35,000 geothermal system would give you a tax credit of $10,500, bringing your true cost down to $24,500.

Does anyone have any experience of how the credit works and how it is written out and if it is indeed true?

Thanks.

 

[TheParamour]

Steevau here on the site is the guy to talk to.

 

[rerun]

I would contact Joe the "Taxman" on here. He would know about any tax credits along with how to go about getting them.

 

[3crabs]

Yea...Steevau has a company that engineers them, and taxman could answer the questions on the tax credit, but I'm sure Steevau would have information on it too.
With a credit like that it will only take 15 years instead of 25 to pay it off...kidding...sorta

 

[Taxman]

The problem is if the tax credits are refundable......many are not
If you make x and your tax liability came down to 500.00
the max credit you could receive is 500.00

Obama is shifting the the lines on your return so they may become refundable like the earned income credit.
not like a child care credit or foreign tax credit......

too much to type on Friday @ 6, but the fact is you may not receive a benefit unless you make enough money to generate a tax

for more details please see my web site
http://www.simaskoaccounting.com/

go to forms and type in geothermal it will bring you to the irs codes and publications

If I was at the office I would be able to give better info.....

joe

 

[Designie]

QUOTE(Taxman @ Aug 14 2009, 06:08 PM) <{POST_SNAPBACK}>The problem is if the tax credits are refundable......many are not
If you make x and your tax liability came down to 500.00
the max credit you could receive is 500.00

Obama is shifting the the lines on your return so they may become refundable like the earned income credit.
not like a child care credit or foreign tax credit......

too much to type on Friday @ 6, but the fact is you may not receive a benefit unless you make enough money to generate a tax

for more details please see my web site
http://www.simaskoaccounting.com/

go to forms and type in geothermal it will bring you to the irs codes and publications

If I was at the office I would be able to give better info.....

joe

No problem, Joe. I called your office earlier and left a message before this. I'll get in touch with you next week. Thanks!

 

[steeveau]

It's true that as of Feb 2009 there is no limit on the 30% tax credit for residential systems. I've yet to find a tax man who understands. The commercial tax credit is only 10% but can also be taken as a grant. I'm pursuing the grant for the system that was installed at my office.

If you'd like a second look at what you're thinking about doing shoot me a PM.

This heat pump manufacturer has a good tax credit summary:
http://www.climatemaster.com/index/tax-information

Steve

 

[NOVA J]

I think you should just get a high efficiency forced air system, and get the $1,500 credit. you wont see the rewards of a geothermal system for years. Its very expensive to install initially. LOL just me being nosy

 

[Designie]

Well after reading the forms from the links on Taxman's site, I came away with this: The credit is 30% of the cost of the system with no upper limit. But I think what Joe was referring to as not a "refundable" credit, is that you don't just get 30% of the cost back in cash. Looking at the worksheet, you take the amount of your credit, subtracting of course other credits that you may get like child care credit, and you get a net amount. If that amount is MORE than what your TAX for this year is, you will only get credit this year for the amount of your tax. ie If your credit is $10,000.00, and your federal tax is $8,000.00, you will only get the $8,000.00 (Basically making your tax liability for the year zero). But it also has a line that says carryover to 2010, which is the amount leftover, which in this case would be $2,000.00.

SOOOO, from what I read, you won't just get cash back in whatever the amount of the credit is, but your taxes will be reduced by the credit amount, even if it takes more than a year.

That's just my interpretation from reading, I'm probably WAY off, but we'll see!

But as far as the geothermal system cost overall, the reason this credit is so important is that if the 30% comes off the price, the geo system will be nearly the same as forced air gas.

 

[Designie]

Well, here's an excerpt from that Climatemaster brochure. It seems to say what I thought the tax form said.

 

[Kat]

QUOTE(Designie @ Aug 15 2009, 09:19 PM) <{POST_SNAPBACK}>Well after reading the forms from the links on Taxman's site, I came away with this: The credit is 30% of the cost of the system with no upper limit. But I think what Joe was referring to as not a "refundable" credit, is that you don't just get 30% of the cost back in cash. Looking at the worksheet, you take the amount of your credit, subtracting of course other credits that you may get like child care credit, and you get a net amount. If that amount is MORE than what your TAX for this year is, you will only get credit this year for the amount of your tax. ie If your credit is $10,000.00, and your federal tax is $8,000.00, you will only get the $8,000.00 (Basically making your tax liability for the year zero). But it also has a line that says carryover to 2010, which is the amount leftover, which in this case would be $2,000.00.

SOOOO, from what I read, you won't just get cash back in whatever the amount of the credit is, but your taxes will be reduced by the credit amount, even if it takes more than a year.

That's just my interpretation from reading, I'm probably WAY off, but we'll see!

But as far as the geothermal system cost overall, the reason this credit is so important is that if the 30% comes off the price, the geo system will be nearly the same as forced air gas.
ding ding ding givr that man a quipie doll