Geothermal Tax Credits

Geothermal Tax Credits

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). H.R. 1424 offers a onetime 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 2008. 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.

Visit www.dsireusa.org to find additional tax incentives that may be available in your state.

Download the brochure: Understanding the Federal Tax Incentives
Personal Income Tax Form: Residential Energy Credits (IRS Form 5695)
Compliance Certificate: 
WaterFurnace units that qualify for the tax credit
American Recovery and Reinvestment Act “Buy American” Provisions

Helpful Resources
- Internal Revenue Code - 26 USC §25D – Residential energy efficient property
- IRS Notice - Notice 2009-41: Credit for Residential Energy Efficient Property
- More information about the “Residential Renewable Energy Tax Credit”
- Federal tax credit detail: Energy Star requirements

Consult your tax professional for details.

Looking for a price? Get a no cost, no obligation free estimate.

our service area

We serve the following areas

  • Acme
  • Alden
  • Bear Lake
  • Bellaire
  • Benzonia
  • Boon
  • Boyne City
  • Boyne Falls
  • Brethren
  • Buckley
  • Cadillac
  • Central Lake
  • Charlevoix
  • Copemish
  • East Jordan
  • Eastlake
  • Eastport
  • Elk Rapids
  • Ellsworth
  • Elmira
  • Falmouth
  • Fife Lake
  • Filer City
  • Frederic
  • Gaylord
  • Grawn
  • Grayling
  • Harrietta
  • Interlochen
  • Kaleva
  • Kalkaska
  • Kewadin
  • Kingsley
  • Lake Ann
  • Lake City
  • Mancelona
  • Manistee
  • Manton
  • Mc Bain
  • Merritt
  • Mesick
  • Old Mission
  • Onekama
  • Petoskey
  • Rapid City
  • South Boardman
  • Thompsonville
  • Traverse City
  • Wellston
  • Williamsburg
Our Locations:

GeoFurnace Heating & Cooling, LLC
886 Us Highway 31 S
Traverse City, MI 49685
1-231-668-6733
Top