Tax Credits

Newest Tax Credit Information for the USA

You may have seen around the net that there is a tax credit of up to $300 for installing an energy-efficient tankless water heater. The news got better in February 2009, when President Obama signed The American Recovery and Reinvestment Act of 2009. Now tax credits have been increased from 10% to 30% of the cost of adding a tankless water heater (and various other things) to an existing house, and the maximum credit has been raised to $1500 for tankless water heaters that qualify.

The credits that apply specifically to tankless water systems are good from now until the end of 2010. Do note that not all brands and models quality.

Here's what you need to do to get the credit:

  1. Choose a qualifying heater. It has to be gas.
  2. Get a copy of the Manufacturer's Certification Statement. For example, here it is in PDF format from Bosch , for their 2400ES and 2700ES.
  3. Keep it and your receipts till the next time you file your personal income taxes.
  4. With these papers, note the date that the unit was installed and started working -- this is the date it was "placed in service" and much be within specific dates.
  5. With your taxes, file IRS form 5695.

There may also be state tax credits or incentives offered by your local power company, so check them out too. One good resource is http://www.dsireusa.org/

References

Residential Energy Efficiency Tax Credit
http://www.dsireusa.org/library/includes/incentive2.cfm?Incentive_Code=US43F&State=federal&currentpageid=1&ee=1&re=1

Here is the Energy Star page about what the specifications are for various kinds of water heaters:
http://www.energystar.gov/index.cfm?c=water_heat.pr_crit_water_heaters

… and here is a chart from that page, where I have highlighted the information about whole-home gas tankless water heaters. Clicking on the image will also take you to that page.

residental water heaters key product criteria chart