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American Recovery and Reinvestment of 2009
Last Post 05 Mar 2009 12:32 PM by senecarr. 19 Replies. |
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TechGromit
Advanced Member
Posts:634
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| 20 Feb 2009 08:47 AM |
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There has been a lot of discussion regarding the new tax bill the American Recovery and Reinvestment Act of 2009. People have been looking a all different versions of the bill and trying to interrupt it. I think of lot of the confusion is directly related to people interrupting incorrect versions of the bill. I believe this is the final version of the law.
http://frwebgate.access.gpo.gov/cgi-bin/getdoc.cgi?dbname=111_cong_bills&docid=f:h1enr.pdf
the Signature Properties certified the final version date 02/17/2009. If we were to do a search on Geothermal, and ignore the first 2 hits since they relate directly to geothermal energy production. We come up with this:
SEC. 1603. GRANTS FOR SPECIFIED ENERGY PROPERTY IN LIEU OF
TAX CREDITS.
(a) IN GENERAL.—Upon application, the Secretary of the
Treasury shall, subject to the requirements of this section, provide
a grant to each person who places in service specified energy property
to reimburse such person for a portion of the expense of
such property as provided in subsection (b). No grant shall be
made under this section with respect to any property unless such
property—
(1) is placed in service during 2009 or 2010, or
(2) is placed in service after 2010 and before the credit
termination date with respect to such property, but only if
the construction of such property began during 2009 or 2010.
(b) GRANT AMOUNT.—
(1) IN GENERAL.—The amount of the grant under subsection
(a) with respect to any specified energy property shall be the
applicable percentage of the basis of such property.
(2) APPLICABLE PERCENTAGE.—For purposes of paragraph
(1), the term ‘‘applicable percentage’’ means—
(A) 30 percent in the case of any property described
in paragraphs (1) through (4) of subsection (d), and
(B) 10 percent in the case of any other property
…
(this is section D)
(d) SPECIFIED ENERGY PROPERTY.—For purposes of this section,
the term ‘‘specified energy property’’ means any of the following:
…
(Since Geothermal Heat pumps are in Paragraph 8 and not in 1 thru 4, we can determine that the 30 percent does NOT apply to Geothermal, we are left with 10% with no $ cap)
(8) GEOTHERMAL HEAT PUMP PROPERTY.—Any property
described in clause (vii) of section 48(a)(3)(A) of such Code.
Such term shall not include any property unless depreciation (or
amortization in lieu of depreciation) is allowable with respect to
such property.
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senecarr
Basic Member
Posts:211
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| 20 Feb 2009 08:52 AM |
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The problem is the part you are referencing is for business tax credit.
The personal credit requires that you have the tax code itself in front of you. Basically, in the stimulus you linked, go to SEC. 1122.
SEC. 1122. MODIFICATION OF CREDIT FOR RESIDENTIAL ENERGY EFFICIENT
PROPERTY.
(a) REMOVAL OF CREDIT LIMITATION FOR PROPERTY PLACED
IN SERVICE.—
(1) IN GENERAL.—Paragraph (1) of section 25D(b) is
amended to read as follows:
‘‘(1) MAXIMUM CREDIT FOR FUEL CELLS.—In the case of
any qualified fuel cell property expenditure, the credit allowed
under subsection (a) (determined without regard to subsection
(c)) for any taxable year shall not exceed $500 with respect
to each half kilowatt of capacity of the qualified fuel cell property
(as defined in section 48(c)(1)) to which such expenditure
relates.’’.
(2) CONFORMING AMENDMENT.—Paragraph (4) of section
25D(e) is amended—
(A) by striking all that precedes subparagraph (B) and
inserting the following:
‘‘(4) FUEL CELL EXPENDITURE LIMITATIONS IN CASE OF JOINT
OCCUPANCY.—In the case of any dwelling unit with respect
to which qualified fuel cell property expenditures are made
and which is jointly occupied and used during any calendar
year as a residence by two or more individuals, the following
rules shall apply:
‘‘(A) MAXIMUM EXPENDITURES FOR FUEL CELLS.—The
maximum amount of such expenditures which may be
taken into account under subsection (a) by all such individuals
with respect to such dwelling unit during such calendar
year shall be $1,667 in the case of each half kilowatt
of capacity of qualified fuel cell property (as defined in
section 48(c)(1)) with respect to which such expenditures
relate.’’, and
(B) by striking subparagraph (C).
(b) EFFECTIVE DATE.—The amendments made by this section
shall apply to taxable years beginning after December 31, 2008.
It applies to this part of the tax code
http://www.northeastgeo.com/pdf/code25D.pdf
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senecarr
Basic Member
Posts:211
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| 20 Feb 2009 08:54 AM |
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Basically, for 2009 tax year the bill takes the existing law
(a) Allowance of credit.
In the case of an individual, there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the sum of—
(1) 30 percent of the qualified solar electric property expenditures made by the taxpayer
during such year,
(2) 30 percent of the qualified solar water heating property expenditures made by the
taxpayer during such year, 1
(3) 30 percent of the qualified fuel cell property expenditures made by the taxpayer
during such year 2 , 3
4(4) 30 percent of the qualified small wind energy property expenditures made by the
taxpayer during such year 5 , and
6(5) 30 percent of the qualified geothermal heat pump property expenditures made by the
tax payer during such year.
(b) Limitations.
(1) Maximum credit.
The credit allowed under subsection (a) (determined without regard to subsection (c) ) for
any taxable year shall not exceed— 7 ,
(A) $2,000 with respect to any qualified solar water heating property expenditures, 9
(B) $500 with respect to each half kilowatt of capacity of qualified fuel cell property
(as defined in section 48(c)(1)) for which qualified fuel cell property expenditures
are made 10 , 11
(C) $500 with respect to each half kilowatt of capacity (not to exceed $4,000) of
wind turbines for which qualified small wind energy property expenditures are made
13 , and
(D) $2,000 with respect to any qualified geothermal heat pump property
expenditures.
and replaces it with this in 2009
(a) Allowance of credit.
In the case of an individual, there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the sum of—
(1) 30 percent of the qualified solar electric property expenditures made by the taxpayer
during such year,
(2) 30 percent of the qualified solar water heating property expenditures made by the
taxpayer during such year, 1
(3) 30 percent of the qualified fuel cell property expenditures made by the taxpayer
during such year 2 , 3
4(4) 30 percent of the qualified small wind energy property expenditures made by the
taxpayer during such year 5 , and
6(5) 30 percent of the qualified geothermal heat pump property expenditures made by the
tax payer during such year.
(b) Limitations.
(1) MAXIMUM CREDIT FOR FUEL CELLS.—In the case of
any qualified fuel cell property expenditure, the credit allowed
under subsection (a) (determined without regard to subsection
(c)) for any taxable year shall not exceed $500 with respect
to each half kilowatt of capacity of the qualified fuel cell property
(as defined in section 48(c)(1)) to which such expenditure
relates.’
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TechGromit
Advanced Member
Posts:634
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| 20 Feb 2009 09:45 AM |
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Basically, in the stimulus you linked, go to SEC. 1122.
SEC. 1122. MODIFICATION OF CREDIT FOR RESIDENTIAL ENERGY EFFICIENT
PROPERTY.
It applies to this part of the tax code
http://www.northeastgeo.com/pdf/code25D.pdf
I'm still trying to figure this out, Far as I can determine section 1122 refers to Fuel cells I don't see anything that says anything about Geothermal. As for the link, since it's not linked to a bill, I question where they copied and pasted the material from, so I deem it questionable. I'm looking for the final version of the bill it modifies, to see how it changes it. If this indeed true, I can't beleive the laws are so confusing, to alter an existing law by simply stating you removing this sentence from another tax law without restating the entire section modified. |
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senecarr
Basic Member
Posts:211
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| 20 Feb 2009 09:53 AM |
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Posted By TechGromit on 02/20/2009 9:45 AM Basically, in the stimulus you linked, go to SEC. 1122.
SEC. 1122. MODIFICATION OF CREDIT FOR RESIDENTIAL ENERGY EFFICIENT
PROPERTY.
It applies to this part of the tax code
http://www.northeastgeo.com/pdf/code25D.pdf
I'm still trying to figure this out, Far as I can determine section 1122 refers to Fuel cells I don't see anything that says anything about Geothermal. As for the link, since it's not linked to a bill, I question where they copied and pasted the material from, so I deem it questionable. I'm looking for the final version of the bill it modifies, to see how it changes it. If this indeed true, I can't beleive the laws are so confusing, to alter an existing law by simply stating you removing this sentence from another tax law without restating the entire section modified.
Sorry to tell you this, but it is in fact how a lot of laws are written. It made this one a giant pain because I had trouble finding a the version of the 1980 tax law that was up-to-date with the 2008 law to see what would be modified. If you don't use my link, you can find the tax law at I think Cornell, but than you have to apply the 2008 bill to its text (which does the same thing, strike this and put this here) and then layer it with the 2009 stimulus bill.
They aren't kidding when they say most of our representatives don't read what they are voting on. It's written in such a way that on top of being 1,000 pages, you need several other documents that might be 10,000+ pages to know what it changes. |
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senecarr
Basic Member
Posts:211
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| 20 Feb 2009 09:58 AM |
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My father, back when he practiced law liked to tell the story about how legalese works, so that a single comma can screw everything up. One famous case was a man's will said, "I leave the ranch all equipment and horses to my second wife. Everything else goes to my children." Well, the guy surely meant to leave his ranch to his second wife, but as it was written the kids got to tell their step mom, here's all the ranch equipment you want, the house and land is ours. |
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183eej
Basic Member
Posts:127
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| 21 Feb 2009 01:47 AM |
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Posted By senecarr on 02/20/2009 8:54 AM
Basically, for 2009 tax year the bill takes the existing law
(a) Allowance of credit.
In the case of an individual, there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the sum of—
(1) 30 percent of the qualified solar electric property expenditures made by the taxpayer
during such year,
(2) 30 percent of the qualified solar water heating property expenditures made by the
taxpayer during such year, 1
(3) 30 percent of the qualified fuel cell property expenditures made by the taxpayer
during such year 2 , 3
4(4) 30 percent of the qualified small wind energy property expenditures made by the
taxpayer during such year 5 , and
6(5) 30 percent of the qualified geothermal heat pump property expenditures made by the
tax payer during such year.
(b) Limitations.
(1) Maximum credit.
The credit allowed under subsection (a) (determined without regard to subsection (c) ) for
any taxable year shall not exceed— 7 ,
(A) $2,000 with respect to any qualified solar water heating property expenditures, 9
(B) $500 with respect to each half kilowatt of capacity of qualified fuel cell property
(as defined in section 48(c)(1)) for which qualified fuel cell property expenditures
are made 10 , 11
(C) $500 with respect to each half kilowatt of capacity (not to exceed $4,000) of
wind turbines for which qualified small wind energy property expenditures are made
13 , and
(D) $2,000 with respect to any qualified geothermal heat pump property
expenditures.
and replaces it with this in 2009
(a) Allowance of credit.
In the case of an individual, there shall be allowed as a credit against the tax imposed by this
chapter for the taxable year an amount equal to the sum of—
(1) 30 percent of the qualified solar electric property expenditures made by the taxpayer
during such year,
(2) 30 percent of the qualified solar water heating property expenditures made by the
taxpayer during such year, 1
(3) 30 percent of the qualified fuel cell property expenditures made by the taxpayer
during such year 2 , 3
4(4) 30 percent of the qualified small wind energy property expenditures made by the
taxpayer during such year 5 , and
6(5) 30 percent of the qualified geothermal heat pump property expenditures made by the
tax payer during such year.
(b) Limitations.
(1) MAXIMUM CREDIT FOR FUEL CELLS.—In the case of
any qualified fuel cell property expenditure, the credit allowed
under subsection (a) (determined without regard to subsection
(c)) for any taxable year shall not exceed $500 with respect
to each half kilowatt of capacity of the qualified fuel cell property
(as defined in section 48(c)(1)) to which such expenditure
relates.’
This was the way I read the law change. The only limitation was for the fuel cells. The IRC on the Cornell site was last updated, I think, in Jan-08 so I updated it for the 2008 TARP bill then update that for this bill. The only thing I wasn't sure of was if something else changed between Jan-08 and Oct-08. I believe this is it though. There is still some quibbling over the start date. The EPA website still says the geothermal must be placed in service from Jan-08 through Dec-16. Technically, this is still true. It's just that the EPA website is not saying that 2008 installs are subject to the $2,000 cap and I think it is this last part that has everyone's engine rev'd up. That's a lot of money. |
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| Dale Walker<br>EarthTap<br>www.earthtapenergy.com<br>Where the sun never sets on energy savings<br> |
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JAM
New Member
Posts:2
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| 23 Feb 2009 11:43 AM |
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Everyone who installed Geo-Thermal in 2008 should write their respective Congressman and Senators. I have, stating that clarification is needed of the bills intent . Your elected officials have the ability to influence how this bill is implimented with reguard to the tax law. This issue is not resolved until the corresponding tax law is written. Obviously anyone who installed in 2008 wants this benefit. Lets work to get it. |
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Pipemajor
New Member
Posts:56
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| 23 Feb 2009 11:52 PM |
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My local TV station tonight had a short feature on "going green tax benefits":
Want to install geo-thermal heating and cooling in your home, and pay
for it from the savings in fossil fuel costs? You will like the
investment tax credit in the stimulus bill.
Thirty percent of the cost of the new energy efficient product will
come right off your final tax bill, saving you about a third the cost.
Same holds true if you want to put up your own private 100 kilowatt
windmill, or install high energy efficient windows, especially helpful
for the big window-makers in Minnesota.
In some cases, you won't have to wait for the tax credit. There is a
provision in the bill that calls on the government to simply write you
a check for the equivalent of the credit. Whether you want to stop
global warming, or stop paying high gas and electric bills, here is
some taxpayer money that goes right back into your pockets.
I've not heard of any "instant rebate" feature of the bill. I've contacted the reporter for additional information.
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tuffluckdriller
Advanced Member
Posts:630
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| 24 Feb 2009 12:19 AM |
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As always, I'd not trust all of what gets reported on the news. They seem to always miss some point.
There is an option of getting a grant check instead of the tax credit, but I think it only applies to the commercial credit of 10%. Not totally sure, though. Maybe I should broadcast it on the news because I'm not totally sure. |
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| Clark Timothy ([email protected])<br>Geothermal Heat Pumps: Heating and Cooling that's Dirt Cheap!<br>www.pinksgeothermal.com |
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mjablons
New Member
Posts:6
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| 24 Feb 2009 08:39 AM |
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Another option: If you can plan out your income, deductions, and geothermal tax credit for this year, you can submit an updated W-4 to adjust your federaly income tax withholdings. This will get you the credit spread out in every pay check this year instead of waiting for your refund next april. |
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183eej
Basic Member
Posts:127
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| 24 Feb 2009 09:04 AM |
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Posted By mjablons on 02/24/2009 8:39 AM
Another option: If you can plan out your income, deductions, and geothermal tax credit for this year, you can submit an updated W-4 to adjust your federaly income tax withholdings. This will get you the credit spread out in every pay check this year instead of waiting for your refund next april. That is a great idea. |
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| Dale Walker<br>EarthTap<br>www.earthtapenergy.com<br>Where the sun never sets on energy savings<br> |
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Pipemajor
New Member
Posts:56
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| 24 Feb 2009 11:01 AM |
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Posted By mjablons on 02/24/2009 8:39 AM
Another option: If you can plan out your income, deductions, and geothermal tax credit for this year, you can submit an updated W-4 to adjust your federaly income tax withholdings. This will get you the credit spread out in every pay check this year instead of waiting for your refund next april. And that's what you should be doing on an annual basis. Many people purposely overwithhold because that gives them back a larger refund. They don't realize they are simply giving the gov't an interest-free loan for 15 months. Likewise, you don't want to underwithhold to the extent you get hit with a penalty. The 2009 stimulous plan will lower your tax rate AND direct employers to deduct less out of your paycheck - giving you a real-time tax reduction. My geothermal tax credit will be larger than my entire annual federal tax liability. It is very difficult however, to not have any tax withheld. |
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[email protected]
New Member
Posts:25
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| 02 Mar 2009 10:57 PM |
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qualified geothermal heat pump property
expenditures,
Does this mean to total price of installing the entire heat pump system or just the heat pump unit itself? |
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Pipemajor
New Member
Posts:56
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| 03 Mar 2009 08:20 AM |
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It should be the entire cost for you to have this equipment installed. This is NOT a DIY project.
I had to pay $1300 out of pocket for my electrical service upgrade. I will include this cost. I also paid $500 for my ductwork to be cleaned but will NOT include that service as that is considered routine maintenance. |
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senecarr
Basic Member
Posts:211
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| 03 Mar 2009 08:34 AM |
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FYI, if you want to follow mjablons suggestion, I'd take a look at
http://www.irs.gov/individuals/page/0,,id=14806,00.html
It's a with-holding calculator from the IRS that will give you an idea of what to put in as your exemptions if you have the pertinent information, like mortgage amounts, paycheck information, number of kids, credits you think you'll be getting like the geothermal / renewable energy property credit |
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TechGromit
Advanced Member
Posts:634
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| 05 Mar 2009 10:27 AM |
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Posted By Pipemajor on 02/24/2009 11:01 AM
And that's what you should be doing on an annual basis. Many people purposely overwithhold because that gives them back a larger refund. They don't realize they are simply giving the gov't an interest-free loan for 15 months.
Yea, Yea, I've heard the same thing. And in a perfect world, people would deposit that extra money in the bank and earn interest on there money. But in reality what happens is people piss those couple of extra dollars away each week and it never amounts to anything. Personally I would rather have more taken out and have a nice big tax return. And Face it, even with a 5k tax return, how much interest are we really talking about here? Earn a 2% interest rate, it's less than $100, actually it's more like $50 since you don't start out with 5k at the beginning of the year in the bank, you build it up over the course of the year. In fact I'm trying to get my wife to set her deductions to zero as well, With 10k tax return, we can do quite alot. It's the same arguement i heard all the time about not paying off your mortgage early. Some finicial planners try to get you not use extra money to pay down your principal on your mortgage. They claim it better to invest the extra money, earn more interest on it and get the tax write off from the government on your mortgage interest. In theory is sounds great, but the problem is most people are investing morons. People buy stock when it's hot and panic sell when it's dropping in price. They do the exact opposite of how your suppose to invest to make money. This is why mortgage bonds were so popular for so long, it's a good return on a nice safe investment backed by real estate. Or at least it was until the loan writing standards went to hell. It's not easy as it sounds to beat the market inthe long run and earn more on your money than the interest rate your paying on your mortgage. I say it better to pay off the mortgage early. It's just like the lottery, most people take there lottery winnings in one lump sum. They somehow beleive they can invest the money more wisely in one lum sum, then getting it from the state over 20 to 26 years of installments. |
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senecarr
Basic Member
Posts:211
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| 05 Mar 2009 10:52 AM |
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Tech, if that's honestly what works for you, over say setting up some kind of direct deposit that puts the difference in your savings or such automatically, that's fine.
I have unfortunately, known a lot of people that don't understand the basic concept that you are giving the government an interest free loan on your money. They somehow actually think that putting a lower deduction on their with-holding that it magically makes money in their tax return. For some reason, there are a number of people that can't understand money in is money out in the equation. Heck, I'm related to some of them.
Personally, I use the IRS with-holding calculator each year because my company has traditionally paid out a large amount of wages as a bonus, which federal rules require they withhold at a 25% rate. Well, with a stay at home wife, and 3 kids, I can tell you, I'd be incredibly happy if a 25% tax rate was the right amount to tax me, but it's pretty far off the mark. So I adjust the with-holding to even it out. |
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[email protected]
New Member
Posts:25
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| 05 Mar 2009 11:57 AM |
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Thanks for all the great tax advise but what I really need to know is what is covered under the rebate -
the heat pump?
the field?
the ducts or circulation pumps etc.
labor? |
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senecarr
Basic Member
Posts:211
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| 05 Mar 2009 12:32 PM |
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"Qualified geothermal heat pump property costs.
Qualified geothermal heat pump property costs are
costs for qualified geothermal heat pump property
installed on or in connection with your home located in
the United States. Qualified geothermal heat pump
property is any equipment that uses the ground or
ground water as a thermal energy source to heat your
home or as a thermal energy sink to cool your home.
To qualifiy for the credit, the geothermal heat pump
property must meet the requirements of the Energy
Star program that are in effect at the time of purchase.
The home does not have to be your main home."
Installation, circulation pump, pump, and field are all covered. Duct work should be fine as part of installation. If you wanted to be completely honest and you had zoning done, the IRS could argue that shouldn't be part of your figure. |
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