Taxpayer is building new house and installing ground source heating. They are going to have to drill 3 - 5 wells to get enough water. Is the well drilling and pumps eligible for the 30% tax credit, along with the actual pump and ductwork?
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yes......
The wells would be part of the overall system because they are a necessity in order for the system to do what it is supposed to do. These wells are separate from any other water source and cannot be combined with them due to the antifreeze solution possibly mixing with the domestic water source. If you weren't installing the a geothermal system, you would not be drilling the wells. These are expensive systems with most paying themselves back in 5-7 years tops. After that, for every dollar you are spending in heating/cooling costs, you are getting $3.50 out of your system. (350% efficient). A 90% furnace can only get you $.90 on every dollar you spend.
It was a no brainer for us.
Becky -
From the form 5695 instructions for what costs are included for the credit:
This includes labor costs properly allocable to the onsite preparation,
assembly, or original installation of the property and for piping or wiring
to interconnect such property to the home.Comment
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A taxpayer came in a month ago planning to install such a system next year.
It is called a Geothermal Heat Pump and ALL cost including installation qualifies.
He expects to get a $5100 credit which can be carried over to subsequent years through
2016. That $5100 credit was the difference between a regular air conditioning system
and the geothermal heat pump. Go to:
[url]www.energystar.gov/index.cfm?c=tax_credits.tx_index to look up the details.Comment
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Thanks, they're putting it in anyway , tax credit or not. Just a bonus. Wanted to be sure what was included before telling them the good news.Comment
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if client is building the house , does this qualify for energy credit. i thought these credits were for existing houses. is there an exception for the geothermal?Comment
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No geothermal exception needed.Originally posted by taxmom34 View Post
More from the Form 5695 instructions:
Who Can Take the Credits
You may be able to take the credits if you made energy saving
improvements to your home located in the United States in 2009. For
credit purposes, costs are treated as being paid when the original
installation of the item is completed, or in the case of costs connected
with the construction or reconstruction of your home, when your original
use of the constructed or reconstructed home begins.Comment
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