Geothermal Heat Pump System

[dyne]

A taxpayer may install a geothermal heating and cooling system and get an energy credit. He may need to obtain a permit to install the pipes underground. An energy credit of 30% appears to be allowable and is NOT limited to $1500. The excess credit over the current federal tax liability can be carried over and used until the year 2026. This carry forward amount is reported on line 28 of the form 5695. My tax software is not showing a carry over amount. This credit may effectively reduce the net cost of a geothermal unit to not much more than the cost of a regular heat pump.
I remember that many years ago some type of tax benefit was allowed for a geothermal
system but IRS ruled that it was not allowed in the southeastern states apparently due to
the warmer climate.
Thanks to BP for his advice.

[BP.]

A taxpayer may install a geothermal heating and cooling system soon. He advised that
he must obtain a permit to install the pipes underground. An energy credit of 30% or
$5100 appears to be allowable and is NOT limited to $1500. His unit will cost about $17,000 compared to about $12,000 for a regular heat pump. He insists that the excess credit over his current federal tax liability can be carried over and used until the year 2026. My tax software is not showing a carry over amount. His credit is $5100 which reduces his $17,000 cost of the unit down to about $12,000 or the cost of a regular heat pump.
I remember that many years ago some type of tax benefit was allowed for a geothermal
system but IRS ruled that it was not allowed in the southeastern states apparently due to
the warmer climate.

Yes, any unused credit that is due to tax liability limit can carryover.
http://www.irs.gov/pub/irs-pdf/f5695.pdf See line 28 & instructions.
But it sounds like he has reached the maximum credit of 30% of $17,000, $5,100, so no unused credit left.

[dyne]

Thank you BP. I found the reference to the form 5695 on the irs.gov site.The URL listed by BP
above appears correct but my computer gave me an Unable to locate message. I found it by
going to irs.gov and entering in the upper right form 5695 or geothermal energy credit.