H.R. 1424 offers a one-time tax credit of 30% of the total investment for homeowners who install residential ground loop or ground water geothermal heat pumps. A credit of 10% of the total investment is also available (no maximum) for a commercial system installation.
To qualify, the systems must meet or exceed EnergyStar requirements and be installed after December 31, 2007. Units installed from 2009 through 2016 can take advantage of the full credit. Owners can file for the credit by completing the Renewable Energy Credits subsection on their tax return form. For taxpayers that are subject to the Alternative Minimum Tax, they can claim the credit on their taxes for the following year. No proof of purchase will be required; however, in case of an audit, owners are encouraged to keep a detailed invoice of their purchase on file. The contractor who sold and installed the product should list the purchase as a "Geothermal Heat Pump" on the invoice and that it "Exceeds requirements of Energy Star program currently in effect".
The tax credit is available through December 31, 2016. Currently, the criteria for Energy Star geothermal heat pumps are: for a closed-loop system, 14.1 EER and a coefficient of performance (COP) of at least 3.3; for an open-loop system, 16.2 EER and 3.6 COP. In addition, the geothermal heat pumps must include a desuperheater, which helps heat water, or an integrated water heating system.