Ok so I have read a few things on the Federal Geo tax credit of 30% It ends at the end of 2016. So the system needs to be installed and running before then. And you have to install a qualified geo unit. But my question is this; Being the 30% is a credit not a refund, do you need to use the full credit by the end of 2016? Let me show a extreme example; Home owner X buys a geo system of $50,000 this year and claims it on his/hers 2015 taxes. (15,000 credit) Home owner X owes the federal government $4000 in taxes per year. So he/she receives $4000 of the credit in 2015, and another $4000 in 2016. Will they receive $4000 in 2017, and the remaining $3000 in 2018? Or do they lose the remaining credit after the 2016 taxes? (In this example they owe $4000 in federal taxes per year every year (not realistic but simplifies the example)) Also a few years back I installed a Solar Pv system and claimed the tax credit for that. Can I receive the Geothermal credit now also? Thanks
The PV and Geo credits are separate.... not sure about the roll over period, I never looked into that.
I received my credit last year for my install in 2013. The numbers were as you exampled. My unused credit rolled over into this year, and my accountant said if it's all not used, it can roll into next year. I would think that the credit is yours to use even if you have to carry it past 2016.
I thought I read somewhere that the credit had to be taken by 2016. Someone will have to pull out the rules and actually read them to get a definitive answer.
Looked around, best I could find is this, http://www.dsireusa.org/incentives/incentive.cfm?Incentive_Code=US37F They say; Excess credit generally may be carried forward to next tax year So I'm going to say they should let you take the full credit even after 2016. But its not very clear.
A newbie here. Does the system need to be up and running to qualify for the credit? I just talked with a company and they felt that if it was in process of being installed, but paid for it would qualify. We're getting a house built next year and could be running very close to the deadline.
To take the credit the equipment needs to be in service by the dead line. The credit can carry over to the next taxable event until used up. From what I read it looks like they may extend the credits. Mark
Yes, credit can be carried forward. I did not find a limit on the years it can be carried forward. Yes, system must be put in operation, and you must have paid the money you are claiming. A new bill was just introduced for the extension beyond 2016. Neither state or federal government can get to their emission goals without heat pump technology, given that 75% of household energy use is for space conditioning and domestic hot water. The legislature gets this. We just went through the hoops in New York State, and the legislature here just passed a bill for 25% state tax credit, and exception from sales taxes. It is on Cuomo's desk to sign.
Thanks Mark. I hope they extend the credits, but I haven't seen anything about that yet. I would prefer to wait and sell our current house before starting on the new one with the heat pump, but would hate to lose out on the credits.
Tax Credit Extension Bill Introduced Sen. Brian Schatz (HI) and co-sponsors Sen. Martin Heinrich (NM), Dianne Feinstein (CA), Cory Booker (NJ), Al Franken (MN) and Sheldon Whitehouse (RI) introduced legislation to extend the Sec. 25D Residential Energy Efficiency Property Credit for five years beyond its sunset date of Dec. 31, 2016. The tax credit applies to residential rooftop solar systems, solar water heaters, geothermal heat pumps and small wind turbines, but is set to expire at the end of 2016. “The Geothermal Exchange Organization (GEO) supports the efforts by Sen. Schatz and his co-sponsors,” said GEO President Doug Dougherty. “With the Thompson bill in the House, momentum is growing to extend our tax credits as the construction economy improves.”
Curious about the "paid for" part. Some installers are offering really good financing to go with Geo. Like 60 month 0% interest. This is a great option and in the case I was looking at, it wasn't actually financed through the installer, but Wells Fargo. This is common. Wells Fargo is essentially issuing a credit card to the home owner to use, where the purchase from your installer is at a special purchase at the 0% interest rate and 60 months to pay it off without incurring any interest. The question is, even though you are obligated to pay this (it is technically your debt) and it is paid via 'credit card', is this considered 'paid'? To me, the answer is yes, it is paid in full and the full credit can be applied, not just the portion that has been paid toward the balance of the 'credit card'. Thoughts?
