There's never been a better time to install a Geothermal System. Not only will you reduce your energy bill by up to 70%; reduce your carbon footprint; you'll also qualify for a 30% tax credit with a Tri-County Aire WaterFurnace Geothermal System installation.

The Energy Credit
In October 2008, geothermal heat pumps were added to section 25D of the Internal Revenue Code. This credit is a 30% tax credit for qualified geothermal equipment installations through the end of 2016. Property is usually considered to be placed in service when installation is complete and equipment is ready for use. However if the system is part of the construction or renovation of a house, it's considered placed in service when the taxpayer takes residence in the house.

Energy Credit Breakdown:

• 30% of total system cost
• No limit to credit amount for 2009 and beyond
• Can be used to offset AMT tax
• Can be used in more than one year
• Can be combined with solar and wind tax credits
• Can be combined with energy efficiency upgrade credits

What's Eligible
Geothermal equipment that uses the stored solar energy from the ground for heating and cooling, and that meets Energy Star requirements at the time of installation is eligible for the tax credit.

What's Not Eligible
The credit can't be claimed for spending on equipment used solely or hot tub or pool conditioning, nor on used equipment.

How to Claim the Credit
Use IRS Form 5695 (2009) to claim the Residential Energy Efficient Property Credit for systems completed in 2008, the maximum tax credit was capped at $2,000. For property placed in service after the start of 2009, there's no limit on the credit amount. The tax credit can be used to offset both regular income taxes and alternative minimum taxes (AMT). If the federal tax credit exceeds tax liability, the excess amount may be carried forward into future years. Spending on geothermal heat pump property adds to your home's cost basis, but also must be reduced by the amount of the tax credit received.

Non-Business Energy Property Credit
The Non-Business Energy Property Credit is a 30% tax credit (up to $1,500) for spending on qualified energy efficiency improvements made to an existing home between 2009 and 2010. This credit is for improvements in insulation, windows, doors, and solar reflective roofing materials and can be claimed in addition to the Energy Efficiency credit for geothermal property. The improvements must be for a dwelling in the United States that's owned by the taxpayer and used as the principal residence. IRS Form 5695 (2009) is used to claim the credit.

New Energy Efficient Home Credit
Section 45L of the Internal Revenue Code provides building contractors a $2,000 tax credit for the construction or substantial renovation of a new home that achieves a 50% heating and cooling energy cost saving relative to a comparable dwelling that meets the minimum requirements of 2004IECC energy code. The home must be sold prior to the end of 2009 for the builder to receive the credit. The energy consumption reduction must be verified by an independent accredited certifier, such as a RESNET home energy rater. IRS Form 8908 is used to claim the credit. IRS Notice 2008-35 provides detailed guidance.

Home Businesses
If a structure serves as both a residence and place of business, spending may need to be allocated between residential and business use. If residential spending is at least 80%, then all spending qualifies for the residential credit. For commercial spending, there's a 10% tax credit available, and 5-year MACRS accelerated depreciation.

With over twenty years of experience, Tri-County Aire is the HVAC Contractor to call for your heating and air conditioning needs in St. Mary's County, Charles County, and Calvert County Maryland. Call today to schedule a geothermal evaluation.