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Wednesday, June 10, 2009

Tax Credits

In an effort to encourage the wide spread use of geothermal technology Congress passed the Energy Improvement and Extension Act of 2008 (H.R. 1424) which offers a onetime tax credit of 30% of the total investment for homeowners who install residential ground loop or ground water geothermal heat pumps.

Here are some of the stipulations for the residential systems:

1. The system must meet Energy Star requirements in effect at the time the system is completed.

2. The system must be in the taxpayer's residence but is not limited to the primary residence.

3. No proof of purchase will be required; however, in case of an audit, you are encouraged to keep a detailed invoice of your investment on file.

4. There are no specific requirements for the invoice. However, it will be helpful if the invoice states "Geothermal Heat Pump" and that it "Exceeds requirements of Energy Star program currently in effect" on it.

5. The taxpayer has to file the Form 5695 to receive the credit.

6. If you are subject to the Alternative Minimum Tax, you can claim the credit on your taxes for the following year.

7. Can be combined with solar and wind tax credits!

8. Homes must be located in the United States.

9. Includes homes, apartments, condos, and mobile homes.

10. System must be installed between 1/1/2008 and 12/31/2008.

There has never been a better time to invest in a geothermal system! When you couple the tax credit with the energy savings you can expect a full payback in three to five years. Please take advantage of this exceptional opportunity - you’ll be happy you did!


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