Federal Tax Credit on Geo-Thermal Heat Pump

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A reminder that there is a 30% Federal Tax Credit on Qualifying Geo-Thermal Heat Pumps, with no cap. If you have been thinking about replacing these items, you might as well upgrade now and save some money.

Geothermal heat pumps are similar to ordinary heat pumps, but use the ground instead of outside air to provide heating, air conditioning and, in most cases, hot water. Because they use the earth’s natural constant heat, they are among the most efficient and comfortable heating and cooling technologies currently available. This allows the system to reach fairly high efficiencies (300%-600%) on the coldest of winter nights, compared to 175%-250% for air-source heat pumps on cool days.

Units can cost from $5,000 to $10,000 installed and take about 5-10 years for payback.

All ENERGY STAR geo-thermal heat pumps qualify for the tax credit. Criteria for heat pumps: Closed Loop: EER >= 14.1, COP >= 3.3, Open Loop: EER >= 16.2, COP >= 3.6 , Direct Expansion: EER >= 15, COP >= 3.5.

Energy Star has a store location finder to help you find local dealers.

This credit reduces the amount of tax you owe for 2009. The credit is a reduction of total income tax at the bottom of your return. This tax credit is a non-refundable tax credit. Consult your tax adviser for details. Use it or lose it!

Products must have been purchased between January 1, 2009 and December 31, 2010. Units must be placed into service by December 31, 2016.

Double dip: Many local utilities provide financial incentives for purchasing ENERGY STAR qualified windows, doors, and skylights. To find out if rebates or other incentives are available in your area, visit the ENERGY STAR Rebate Finder.

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