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  1. #1
    Join Date
    Dec 2009
    Posts
    6

    Tax Credit? How does it work?

    Sorry if this sounds dumb but while meeting with various HVAC installers for Geo Thermal they all stress the 30% tax credit for 2009.

    My question is this:

    For Example
    If my Geo System total cost is $30,000.00 x 30% = $9000.00 Tax Credit

    Does that mean when I file my taxes is 2010, do I get $9,000.00 added to my return or does my taxable income lower by $9,000.00?

    Thanks!

  2. #2
    Join Date
    Mar 2008
    Location
    northern Indiana
    Posts
    114
    $9000.00 Tax Credit.

  3. #3
    Join Date
    Sep 2007
    Posts
    132
    I'll let you know April 15th.

    I'm expecting a huge tax refund.
    There's a lot to know.

  4. #4
    Join Date
    Apr 2008
    Location
    Northwest Arkansas via Chicago Area via Straight Up from There on Lake Superior
    Posts
    1,411

    IMO

    Quote Originally Posted by crowl31 View Post
    ...

    Does that mean when I file my taxes is 2010, do I get $9,000.00 added to my return or does my taxable income lower by $9,000.00?

    ....
    Neither! I am not a tax adviser but recently did the 2009 credit on an air-source DFHP using TurboTax.

    You need a tax liability of at least $9,000 on Form 1040 Line 44 to get full refund (I don't know anything about Alternate Minimum Tax stuff). If you don't owe that much you will lose part of the credit. The credit is taken on Line 52 supported by filling out Form 5695 describing your 2009 purchase.

    Don't get confused over what you have or haven't paid already. It's against what you owe on Line 44.

  5. #5
    Join Date
    May 2008
    Location
    Missouri
    Posts
    3,505
    As I understand this credit, it is a non-refundable tax credit. If you do not have enough tax liability, then you'll not initiate a refund of the remainder. In this case, you must have a 9k tax liability for this year, or you'll just get the credit only for the tax you paid or owe up to this amount. If you had less than 9k, then you'll lose some of the credit, because you can't get a refund of this left over monies. But to be sure, call a tax pro!!! Or look on Web. for more information. Oh yeah, can't use this credit for new construction either as I understand.

  6. #6
    Join Date
    Dec 2009
    Posts
    6
    So as long as I've paid 9k in taxes this year I am eligble to get the full credit.

  7. #7
    Join Date
    Apr 2006
    Location
    South West Ohio
    Posts
    399
    I am told by our bean counter. that it is a roll over credit. Say I have $9000. credit comming and only owe $6000. I can roll the left over 3G to next year.

  8. #8
    Join Date
    May 2008
    Location
    Missouri
    Posts
    3,505
    I truly hope your "roll over" credit is true, as I just had a customer tell me they were using about 3 or 4 home improvements as credits this year on their taxes, and unless I'm mistaken, they can't use all the credits up in just this year's return.

  9. #9
    Join Date
    Apr 2008
    Location
    Northwest Arkansas via Chicago Area via Straight Up from There on Lake Superior
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    1,411
    Quote Originally Posted by crowl31 View Post
    So as long as I've paid 9k in taxes this year I am eligble to get the full credit.
    No! Not "paid", but "owed"! Don't be confused between what you paid and what you owe as stated on line 42 of IRS 1040.

  10. #10
    Join Date
    Apr 2008
    Location
    Northwest Arkansas via Chicago Area via Straight Up from There on Lake Superior
    Posts
    1,411
    Quote Originally Posted by voleye View Post
    I am told by our bean counter. that it is a roll over credit. Say I have $9000. credit comming and only owe $6000. I can roll the left over 3G to next year.
    When you are talking about the geothermal, solar, wind, fuel cell 30%, no limit credits, you apparently can roll the credit: http://energystar.custhelp.com/cgi-b...i=&p_topview=1

    Other HVAC credits are limited to $1500 and cannot roll to 2010.

    I would like to correct my Post 4 in this thread. The statement "If you don't owe that much you will lose part of the credit." applies to NON-geo, solar, wind, fuel cell purchases. I lost track that this was discussing a geo purchase.

  11. #11
    Join Date
    Apr 2005
    Location
    N. E. Missouri
    Posts
    9,750
    Perhaps think of it this way. If Uncle Sam generally keeps some of your money (federal income tax only!!) and you do NOT get a full refund of everything withheld during the year, a tax credit will help you recover THAT AMOUNT HELD. In no circumstances will you get back more than your overall tax liability for the year. Say your employer held out your 9,000 dollars and, with your deductions, dependents etc. you are expecting 5,000 of that money back in a tax refund. Any tax credits could only give you the difference. So, if your credits equaled 9,000 dollars and your remaining tax liability was 4,000 dollars (what you wouldn't have gotten refunded anyway) you can claim credit against the 4,000 dollars.

    And I'd be very careful trying to 'roll over' any credit. Some are and some aren't. Most appear NOT to be roll overs. Just as they aren't 'refundable' credits. If you don't have a job and/or don't pay any taxes tax credits give you absolutely zilch.

    Here's what the energy star website says about it:

    The tax credit for products at 30% up to $1,500 CAN NOT be carried over to future years. You can't even carry forward tax credit dollars from 2009 to 2010. But you can take part of the $1,500 in 2009, and the rest in 2010 - if they are for separate purchases (ex: you spend $3,000 on windows in 2009 and get a $900 tax credit on your 2009 taxes, then spend $2000 on an air conditioner in 2010 and get a $600 tax credit on your 2010 taxes).

    The tax credit for the following products at 30% with no upper limit CAN be carried forward to future years:

    Geothermal Heat Pumps

    Solar Panels

    Solar Water Heater

    Small Wind Energy Systems

    Fuel Cells

    You can carry forward the credit as long as the credit is still in effect. In this case, the credit is in effect through 2016. The energy efficiency tax credit is technically "non-refundable" which means at the end of the year, you can't get back more in credits than you paid to the government in taxes throughout the year. If you are unable to claim the entire 30% of your purchase for the above products, you can carry forward the unclaimed portion to future years through 2016.

    The tax credit for insulation, windows, doors, roofs, HVAC, biomass stoves, and non-solar water heaters CAN NOT be carried over. These credits are for 30% of the cost, up to $1,500 in 2009 and 2010.


    http://energystar.custhelp.com/cgi-b...ZWF0ICs*&p_li=
    Do not argue with an idiot. He will drag you down to his level and beat you with experience.

  12. #12
    Join Date
    Apr 2008
    Location
    Northwest Arkansas via Chicago Area via Straight Up from There on Lake Superior
    Posts
    1,411
    Believe that Mrs Reb and I both said the same thing and pointed to the same Energy Star web page. Both of us caution you to be clear about "normal" HVAC installs (NG, propane, air source/AC, oil systems) which cannot be rolled and the ones that can be rolled which must be geothermal, solar, wind or fuel cell based.

    Our posts must have passed in the night.

  13. #13
    Join Date
    Apr 2006
    Location
    South West Ohio
    Posts
    399
    I should have said that also. Our beancounter advised us the GEO tax credit can roll over. NOT the air to air side.
    BUT he told us he thought the credits for windows, HVAC, doors, roofs, ect can be added together for one year. He was doing more research on that.

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