NO! There is no earnings cap, that we have heard about. However, if you are one of those EVIL rich people... 


Bergy

The tax break is 30% of the cost of putting in geothermal and you may only receive a maximum of $2000.  I have first hand experience with this.  Please do not invest in this system with your hopes of the big tax break.  Also, please research the company and the installer thorougly.  You will find that the pay backs are much farther than they would have you believe.  Also, if you have natural gas, may need even more research on actual pay back.   According to me, definitely not worth it if you are taking out a mortgage on it!

Please see my forum Faulty Earthlinked DX systems to see all the PROBLEMS I have had insipte of a wonderful installer.  Hope this helps.

drao, I'm sorry for your obvious bad experience with geothermal. This is not meant in a disrespectful way, but you are incorrect about the $2,000 cap in 2009 - you are correct for 2008 installations.

Please see this link for details: http://www.energystar.gov/index.cfm?c=tax_credits.tx_index

Or read the tax law.

There was a $2,000 cap in place in 2008, starting January 1, 2009 through 2016 there is no cap.

The law was changed this year to remove the cap of $2,000. There is still caps on some other programs like water heaters and insulation but not GTHP. I spent $25,000 on my install and with the 30% rebate which I'll get when I file my 2010 taxes I will have brought the system cost down very close to what a good gas system would have cost. As for living with geothermal, I don't know how or why anyone would live without it. I'm heating/cooling 4,800 sq-ft and I'm looking at a annual cost of under $1,000.

Good advice. Read the law from the link posted by Ona and hire a contractor that is certified by IGSHPA.

....and don't count on anything not yet written such as the 2009 tax code.
Congresses intent is a full 30%. IRS has not yet written the form (I'm sure they will not deviate from the intent of the bill ;).
We know what was intended......does the IRS?
By the way, with or without credits, geo will pay for itself (just might take longer).
Good Luck.
Joe

that tax credit looks to be good until 2016. If you're doing ducts, etc, it's a no brainer to me.

Have your accountant advise you. Ducts are not necessarily part of the geo cost/credit as they would be required for any new build warm air system.
j

The link below leads you to a draft version from the IRS of what they expect in the new 2009 tax form 5695 for geothermal.

www.irs.gov/pub/irs-dft/f5695--dft.pdf

As you can see, in this draft version there is no cap. Also, in the language of the signed Act, there is no cap for 2009 through 2016.

I called the IRS and they directed me to a few forms but they weren't sure if ductwork, humidity control, air filter system and such was covered. They said everything leading up to and including the pump was but had no definitive answer for the rest. Anyone know for sure what's up?

No.
No one knows for sure 'cause they are not past the draft stage for the tax form.
J

One thing I found on the Energy Star site that's interesting to me because I hear a lot of misinformation is that you ARE able to carry over some of the tax credit to the following year if you can't use all of it. This must be a new change and I think applies to other green measures such as solar and wind power.

dkubarek, thank you for mentioning one of the more obscure, but important, items related to the tax credit.

I don't know if this will find its way into the tax code for 2009, and I'm not a tax expert, but in a similar vein I recall reading something about reducing the cost basis of the house in an amount equal to the energy tax credit claimed for a residence. There are some exclusions of profits that are available when selling a home, but too complicated to thoroughly mention here. I recall reading that basis values can change based on certain circumstances, but I am not positive. The bottom line is that under the right (or is it wrong) circumstances, the government may want some money back, however this probably will not apply to everyone. As always, consult with your tax accountant to be sure.

I see that phased tax credit thing that you mention with the First Time Homebuyer Program. You have to live there several years or else you owe uncle sam when you sell. I'm staying put unless the bank throws me out so I'm good to go.

dkubarek, if you are referring to my comment, and again I'm no tax expert, the changing of the cost basis of the house would apply to everyone taking the credit if the tax code incorporates this 2008 provision in 2009. Whether this change in the basis cost has a financial impact on someone selling their house would depend on the owners particular situation and the tax law at the time they sell. I'm not familiar with the phased tax credit you mentioned. We plan on staying in our home for a long time too. I'll worry about the cost basis after I've passed on!