We installed our EPA-qualified ground source heat pump January, 2009 which gets us the federal 30% tax credit with no cap per the American Reinvestment and Recovery Act.  I am in the process of filing our 2009 tax return where we will get the credit applied toward our 2009 taxes and carry the remainder over to our 2010 return since the federal rebate was higher than my tax liability in 2009.

I was researching Minnesota's "Cash for Clunkers Appliance Rebate" program which begins on March 1 and ran into some data indicating the state will apply their portion from ARRA funding to residents who want to install a GSHP.  The state program (Minnesota) will rebate 35% of the equipment and installation costs up to $10,000.  Hmmmm....  I translate that into a rebate which will not exceed $3,500.

There are some pre-approval tasks which need to be submitted.  It looks if my system (a Waterfurnace dual stage ND049) complies with the required Energy Star qualifications and the installation met all other requirements with the possible exception of the first bullet below:

• Residential Ground Source Heat Pump system installations completed from July 1, 2009 through February 16th, 2010 must meet program requirements and the applicant must submit all of the information in the above Rebate Application Checklist to claim the rebate.
• The rebate amount is 35% of eligible system and installation costs up to $10,000. The rebate amount cannot exceed the total cost of an installation minus federal, utility or other incentives.

Since ours was installed prior to the July 1, 2009 date above, this may sink me.  I was fortunate my install occurred after Dec, 2008 which qualified me for the "no cap" federal rebate of 30% of the entire cost.

I'll contact our state Office of Energy Security this week to inquire.  For those of you considering making the move to GSHP, you may want to check with your state to see if you can qualify.  It appears the federal and state programs are not mutually exclusive.

Federal rebates expire the end of 2010.

Link to MN state rebate

I talked to a person by the name of Linda Limback at the Minnesota Department of Commerce, Energy Division about this credit back in late 2009. She propbably would have all the details that you need to get your full rebate. At the time I had read that, it was only in the proposal stages. It sounds like maybe there were a few changes to it since I looked at it last. The one thing that stuck out to me in the new version is that it says that it's only available for existing primary residences. The rebate does not apply to new construction but then it also says that if contruction begins after Feb 16th, 2010 you have to follow a different process. I wasn't sure what it all really meant. I would like to build a new home later this year and have a geo system installed. Will I be eligeable for the MN rebate? I don't know. I guess I'll have to find out when my build starts! Reply with your findings or send me a pm if and when you talk to Linda. I'd also me interested in knowing a little more about your geo system.

Regards,
600rmk

I got a direct rebate from our utility (Xcel Energy) for the AC portion of my install.  They offer rebates of $150 per ton of cooling for accepted models.  Ours is a 4 ton Waterfurnace dual stage ND049 with closed loop vertical field.  I have 4 wells.  The $600 wasn't bad - certainly worth filling out the form and the cost of the stamp.

Gotta love gov't incentives...

Pipe,

Here's an excerpt from the document you attached:

The rebate amount is 35% of eligible system and installation costs up to $10,000.

I read that as being 35% of the install with a max of $10,000. Not 35% of $10,000. That seems to agree with what I found when talking to Linda. You may find that you're eligible for a much higher rebate than you thought. It's looking extremely attractive to go geo with these incentives. I just wish I could get my house build going to take advantage. My local power company (Connexsus) offers $400/ton rebate on GSHP. It's a pretty good deal. Couple that with 50% electric rates for dual fuel system and its a no brainer.

600rmk

Does the federal rebate run out in 2010? I read 2016.

OK. Here is from the Energy Star.gov website to avoid confusion:

Tax Credit:
30% of cost with no upper limit
Expires:
December 31, 2016
Details:
Existing homes & new construction qualify. Both principal residences and second homes qualify. Rentals do not qualify.

Also, Pipemajor, are you sure that tax liability applies to the equation. I'm no tax expert but I think that a "tax deduction" applies to the liability but a "tax rebate" is just like a mail-in rebate. You get 30% of what you spent regardless. I just know this because my sister makes squat and got the full homebuyer tax credit of over 7K (the home wasn't enough for 8K) and her husband 1099'd about 30K and wrote off much of the income.

I am not a tax pro. My understanding is that the tax credit can only be applied against tax liability (dollar for dollar), with any remainder being carried forward to be used against future years tax liability (up to 15 years?) Has the form been finalized yet?

Where did you hear 15 years? That'll do it if it's true. I heard at one time you could do it for future years as long as the tax rebate still existed, meaning 2016. Either way I'm good.

This was my quote: "(up to 15 years?)" and that "I am not a tax pro." I use a question mark because I don't know and was asking if anybody had more information on this. I remember hearing about loss carry forwards and carry backwards. Not sure if this applied to individuals, or businesses. I have no idea what the IRS will do with the geothermal credit.

I just looked and don't see form 5695 for 2010 available on the IRS web site yet.

Geome, I wasn't trying to be curt about it. Sorry about that. I don't know really either. I assume the form will look like the 2009 form (if one exists). I saw the spec form and it was very vague. Either way, if it's 2016 or later anyone will be able to get what they are owed.

dkubarek, your question was fine. I just wanted to clarify what I said. It will be interesting to see what the form finally looks like. There should be a prize for the first person that tells us that the form has been completed. 

it is total BS that the government can't spell out the rules in a timely fashion. Everyone has to guess on the ROI of these things because you never know the details until it's too late.

Form F5695 has been posted on the IRS website since January 8th.  I already filled out and submitted my taxes in February and included F5696 for my 2009 Geo install and already received my tax return.

It is a credit, not a rebate, so you can only deduct it from taxes you owe.  If you do not owe as much as the credit, you can only take what you owe and carry the rest into 2010.  I do not know if it can extend beyond 2010, as the form does not specify, however, if you do have to carry it to 2010 you should just adjust your tax with holding for 2010 NOW in order to owe at least as much as your remaining credit.

http://www.irs.gov/pub/irs-pdf/f5695.pdf

I'm not a tax professional. Generally speaking, tax liability - withholding (and other tax credits) = tax due or refund. Withholding has no effect on tax liability (unless a person is under-withholding which may lead to a penalty depending on the situation.) If a person would rather get more money in each paycheck, if they know they would otherwise get a refund, reducing withholding dollars may accomplish this.  Of course, the refund check at the end of the year would be less too. As always, check with your tax professional for professional advise specific to your situation.