$300 Tax Credit Deadline for High-Efficiency Water Heaters

South End Plumbing, Heating, & Air Expert Tips

$300 Tax Credit Deadline for High Efficiency Water Heaters
$300 Tax Credit Deadline for High Efficiency Water Heaters

$300 Tax-Credit Deadline For Water Heaters

For complete details on all federal tax credits, see energystar.gov

Energy Star Rated Water Heaters
Energy Star Rated Water Heaters

Is Your High-Efficiency Water Heater Eligible for a Tax Credit?

Deadline Extension: The Non-Business Energy Property Tax Credits have actually been extended from 12/31/2017 through 12/31/2021. This indicates that the tax credit covers purchases of qualifying new non-solar hot water heater (consisting of electric heat pump (hybrid), gas, oil or propane) made prior to December 31, 2021. And the good news is it likewise retroactively applies to purchases made in 2018 and 2019. Ask your tax professional about modifying your return for that year to take advantage of the tax credit. The IRS generally restricts amendments to returns to three years.

What is the Tax Credit?

The Tax Credit: $300 (Maximum of $500 for all energy efficiency enhancements claimed under this credit).
Must Be Purchased by: December 31, 2021
Must Claim Tax Credit By: April 15, 2022
Qualification Details: Equipment should be installed in an existing house & your primary residence. Brand-new construction and rental properties do not apply in the case of this credit.

What are the Requirements?

Electric Heat pump Hot Water Heaters
In order to receive a tax credit of $300, the electric heat pump (hybrid) hot water heater should meet the following requirements:

Uniform Energy Factor (UEF) >= 2.2.

Gas, Oil or Propane Water Heaters
The following criteria must be met in order to receive a tax credit of $300:

Uniform Energy Factor (UEF) >= 0.82 or a thermal efficiency rating of at least 90%.

Click this link for a list of State water heater models that qualify.

How to Qualify?
The federal tax credit just applies to devices installed in existing houses, not new construction. The home should likewise be your primary home– no secondary vacation homes or rentals. You can only claim as much as a total maximum credit of $500 for all of the years (2005-2021) combined. If you have actually already declared $500 from the Nonbusiness Energy Real Estate Tax Credit because 2005, you will not be eligible to declare anymore credits.

How Do You Apply?
File IRS Form 5695 with your income tax return. If you have not submitted your 2020 taxes yet (due April 15, 2021), you can download the 2020 form here. The credit amounts you might get are subject to internal revenue service regulations, so we suggest consulting a tax professional for advice on tax preparation.

What Other Appliances Are Compliant of the Credit?
Even if you do not plan on updating your water heater, you might want to purchase another certifying household home appliance like an a/c unit or heat pump. Check the whole list of certifying appliances.

For full details on all federal tax credits, go to energystar.gov.

* Disclaimer: The tax credit details included within this site is provided for educational purposes just and is not meant to substitute for expert suggestions from a professional tax/financial organizer or the Internal Revenue Service.

South End Plumbing specializes in water heaters, so remember, we are just a click away. We also specialize in tankless water heaters – give us a call! South End Plumbing is one of the only companies that will give you a free estimate. Call us at 704-919-1722 or fill out the form online to schedule a visit.

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