General Instructions For Alternative Energy Systems Credit printable pdf download

Alternative Energy Systems Credit – General Instructions

The credit(s) from Form ENRG-B is allowed only to Montana residents who complete installation of an alternative energy

system in their principal dwelling. The credit(s) must be claimed against the taxpayer’s liability for the year the energy

system was acquired and placed in service. If the amount of the tax credit(s) exceeds your income tax liability for the year,

the excess is carried over to the next succeeding tax year or years until the total credit(s) is absorbed.

Geothermal Energy System Credit

For installations prior to January 1, 2002, the carryover tax credit available is $250 per year for four years from the date of

installation. Line 4 cannot be greater than $250. For installations after December 31, 2001, an individual may take a credit

against their individual income tax liability not to exceed $1,500. Any excess credit not claimed in the year of installation

may be carried over seven succeeding tax years.

“Geothermal system” means a system that transfers energy either from the ground, by way of a closed loop, or from ground

water, by way of an open loop, for the purpose of heating or cooling a residential building. A qualifying system shall transfer

energy either from the ground, ground water or surface water. It should also have a heat pump utilizing a refrigerant cycle. If

the system does no contain a heat pump, utilizing a refrigerant cycle, the “energy conservation purpose” of the system must

be explained.

For the purpose of the Geothermal Energy System Credit installation cost include the cost of a) trenching, well drilling, casing

and downhole heat exchangers; b) piping, control devices, and pumps that move heat from the earth to heat or cool the

building; c) ground source or ground coupled heat pumps; d) liquid-to-air heat exchanger, ductwork, and fans installed with a

ground heat well that pump heat from a well into a building; and e) design and labor.

Alternative Energy System Credit

The tax credit for installing an alternative energy system using a “recognized nonfossil form of energy generation” or a “low

emission wood or biomass combustion device” is available in the year of installation and may be carried forward four

succeeding tax years.

“Recognized nonfossil forms of energy generation” means a system that captures energy or converts energy sources into

usable sources, including electricity, by using

solar energy, including passive solar systems,

wind,

solid waste,

decomposition of organic wastes,

geothermal,

fuel cells that do not require hydrocarbon fuel, or

an “alternative energy system” which is a system or equipment used to convert energy sources into usable sources

using fuel cells that do not require hydrocarbon fuel, geothermal systems, low emission wood or biomass, wind,

photovoltaics, geothermal, small hydropower plants under one megawatt, and other recognized nonfossil forms of

energy generation,

a system that produces electric power from biomass or solid wood wastes, or

a small system that uses water power by means of an impoundment that is not over 20 acres in surface area.

“Low emission wood or biomass combustion device” means a wood-burning appliance that is certified by the U.S.

environmental protection agency pursuant to 40 CFR 60.533; or that uses wood pellets as it primary source of fuel.

Questions? Please call (406)444-6900 or TDD (406)444-2830

General Instructions For Alternative Energy Systems Credit