Geothermal Heating and Cooling Tax Credits
A geothermal heat pump system for your St. Louis home can save you thousands of dollars on energy costs and tax credits! Using the earth’s energy to power your home or business will not only save you money on your utility bill, but it will also reduce your carbon footprint.
The experts at Hoffmann Brothers can help you save on your taxes and utility bills by installing a geothermal system. Hoffmann Brothers is the premier St. Louis, MO Geothermal Heating and Cooling Contractor. Call for your Geothermal Heat Pump Energy Audit and learn more about Geothermal Energy Tax Credits!
Commercial Geothermal Energy Tax Credits
On October 3rd 2008, geothermal heat pumps were added to the definition of energy property under section 48(a) of the Internal Revenue Code, which provides a 10% tax credit for spending on property placed in service through the end of 2016.
Energy property is classified as 5-year depreciable property in section 168(e)(3)(B)(vi)(I) of the Internal Revenue Code, meaning the cost of the property can be deducted on an accelerated MACRS basis. For depreciation purposes, the basis must be reduced by one half of the tax credit. For a corporation in a 35% tax bracket, the MACRS depreciation provides additional tax savings equal to 33.25% of the energy property spending within the first years, and this is largely front-loaded. By comparison, conventional heating and cooling systems are usually depreciated on a 39-year straight line basis, and would provide 4.5% in tax savings over the first 5 years.
Energy property is classified as 5-year depreciable property in section 168(e)(3)(B)(vi)(I) of the Internal Revenue Code, meaning the cost of the property can be deducted on an accelerated MACRS basis. For depreciation purposes, the basis must be reduced by one half of the tax credit. For a corporation in a 35% tax bracket, the MACRS depreciation provides additional tax savings equal to 33.25% of the energy property spending within the first years, and this is largely front-loaded. By comparison, conventional heating and cooling systems are usually depreciated on a 39-year straight line basis, and would provide 4.5% in tax savings over the first 5 years.
Residential Geothermal Energy Tax Credits
On October 3, 2008, the Emergency Economic Stabilization Act of 2008 was signed into law creating a 30% Federal tax credit for homeowners who install geothermal heat pump systems in their new or existing home. This credit applies to geothermal systems placed into service through the end of 2016. At the time of its signing, the credit was capped at $2,000 per tax payer.
The American Recovery and Reinvestment Act of 2009, signed into law on February 17, 2009 removed the $2,000 cap making the credit a full 30% for qualified installations placed into service beginning January 1, 2009.
In addition to Federal geothermal energy tax credits, the State of Missouri offers tax credits along with some utility companies.
Contact the Expert Geothermal Contractors at Hoffmann Brothers
For over 20 years, Hoffmann Brothers has proudly installed and serviced Geothermal and other Energy Efficient heating and cooling systems throughout the St. Louis, Missouri Metropolitan Area. Please give us a call today at (314) 631-5892 or send us an email on our Contact Us page.
Our service area includes St. Louis County, Missouri, St. Louis City, Jefferson County, St. Charles County, St. Clair, Illinois, Madison County, Kirkwood, Chesterfield, Des Peres, Wildwood, Ladue, Town and Country, Frontenac, Clayton, Sunset Hills, and Creve Coeur
