A taxpayer may claim a credit of 30% of qualified expenditures for a system that serves a dwelling unit located in the U.S. used as a residence by the taxpayer. Expenditures with respect to the equipment are treated as made when the installation is completed. If the installation is on a new home, the "placed in service" date is the date of occupancy by the homeowner. Expenditures include labor costs for onsite preparation, assembly, or original system installation and for piping or wiring to interconnect a system to the home. If the federal tax credit exceeds tax liability, the excess amount may be carried forward to the succeeding taxable year. The maximum allowable credit, equipment requirements, and other details vary by technology as outlined below.
Geothermal heat pumps
There is no maximum credit for systems placed in service after 2008. The maximum credit is $2,000 for systems placed in service in 2008.
Systems must be placed in service from January 1, 2008, through December 31, 2016.
The geothermal heat pump must meet federal Energy Star program requirements in effect at the time the installation is completed.
The home served by the system does not have to be the taxpayer’s principal residence.