Geothermal Tax Credits
Save 30% via Federal Tax Credits on a Geothermal Heat System
You may know that geothermal heating systems can offer a huge savings to you in the long run – but did you know that you can also save 30% on the installation of a brand new geothermal unit? That’s right – 30% off the total cost of a geothermal heating system to our Ohio residential customers. Also, businesses can save 10% of the total on a qualifying geothermal heat pump (with no maximum)*.
These savings actually come in the form of a federal tax credit. Thanks to the economic stimulus package, a.k.a. the American Recovery and Reinvestment Act of 2009 (ARRA), any qualifying residential geothermal heating system bought between now and the end of 2016 can get the 30% tax credit. This is a federal tax credit, so it extends across each state, not just Ohio.
What geothermal heating systems apply, you ask? Well they must meet or exceed the EnergyStar specifications and requirements and have an energy efficiency ratings in the 30’s. Contact us about which individual heating systems would qualify.
Note that this is an actual tax credit and not a tax deduction, making this an extremely valuable proposition. The amount will actually be taken off of what you owe. A tax deduction would remove a percentage of the tax you would owe. Think of it this way – you won’t have to pay income taxes on that portion of your pay for the year.
We’ve seen two different ways of filing to the IRS. One says, “Owners can file for the credit by completing the Renewable Energy Credits subsection on their tax return forms for 2008.” The other one said that you need to file IRS Form 5695 and submit that with your year-end income tax. We’ll investigate more and update this page when we find out which route is best. Bear in mind that Buschur’s Refrigeration is not a CPA – so make sure to keep records of all receipts and records and consult a qualified CPA about your geothermal heating unit.
Any qualifying geothermal unit purchased and installed by Buschur’s will list on the invoice that it is a “Geothermal Heat Pump” and that it “Exceeds the requirements of the Energy Star program currently in effect.” When buying a geothermal unit from any contractor, make sure that something similar is on the invoice.
You have until December 31, 2016 to take advantage of this tax credit. Let us know if you have any questions whatsoever.
* Back in 2008 the amount of the geothermal heating credit used to be capped at $2,000 total (Via the Energy Improvement and Extension Act of 2008 (H.R. 1424)) – but now residential installations can take 30% off the full amount and commercial gets 10% off the total.