Tax Credits for Tankless Water Heaters

Federal government encourages household use energy efficient home appliances to save energy. The Energy Policy Act of 2005 provides federal income tax credits to consumers who purchase a qualifying replacement furnace, boiler or water heater. According to the Act, the qualified equipment must be purchased no earlier than January 1, 2006, and no later than December 31, 2007.

Tax credits are available for many types of home improvements including high efficiency heating equipment. And, the maximum available tax credits are as follows:
Furnaces, 95% AFUE or Greater ($150 Tax Credit)
Boilers, 95% AFUE or Greater ($150 Tax Credit)
Electrically Efficient Gas- and Oil-Fired Furnaces ($50 Tax Credit)
Gas- and Oil-Fired Water Heaters, .80 Energy Factor or Greater ($300 Tax Credit)
Electric Heat Pump Water Heaters, 2.0 Energy Factor or Greater ($300 Tax Credit)

However, the maximum amount of tax credit to a homeowner for all improvements will not exceed $500 during the two year period of the tax credit.

In addition to this, the tax payer is required to keep with them a Manufacturer’s Certification, certifying that the product or component qualifies for the tax credit. The IRS encourages manufacturers to provide these Certifications on their website to facilitate identification of qualified products.

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Filed under: Tankless Water Heaters • Uncategorized

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