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Tankless Tax Credit Information

Complete information about the federal tankless tax credits and the products that qualify

The President Extends Tankless Tax Credits!

On January 2, 2013 President Obama signed legislation designed to avoid the “fiscal cliff” and keep tax rates from increasing for every American who pays taxes. In addition to its many other tax provisions, the bill retroactively reinstates the 25C tax credits for highly efficient HVAC and water heating equipment that expired at the end of 2011.

Specifically, the bill extends the tax credits that expired in 2011 from January 1, 2012, until December 31, 2013, for qualified equipment listed in Section 25C of the Internal Revenue Code. Because the credits were made retroactive to January 1, 2012, they can be used for qualified equipment that was installed any time after December 31, 2011. Qualified equipment includes:

Water Heaters ($300 Tax Credit)

  • Electric heat pump water heaters with an energy factor of at least 2.0
  • Natural gas, propane, or oil water heater with an energy factor of at least 0.82 or a thermal efficiency of at least 90 percent

2012-2013 TAX CREDIT SNAPSHOT

  • Receive up to $300 Tax Credit
  • Effective for units placed into service January 1, 2012, until December 31, 2013
  • Natural gas, propane, or oil water heater with an energy factor of at least 0.82 or a thermal efficiency of at least 90 percent

HOW TO GET YOUR TAX CREDIT

  • Choose a qualifying tankless water heater (see list) that suits your needs.
  • Manufacturer’s Certification Statement is required.
  • Save your receipts and Manufacturer’s Certification Statement for tax purposes.
  • Use IRS Form 5695.
  • Improvements must be “placed into service” (this generally refers to the installation, not the purchase) within the specified dates.

ADDITIONAL INFORMATION

Consult a tax professional for more information.

See the DSIRE database of state incentives, or contact your state energy office or local utility service providers for more information about tax credits and rebates in your area.

For more information on the federal tax credits visit ENERGY STAR at http://www.energystar.gov/index.cfm?c=products.pr_tax_credits.

QUALIFYING PRODUCTS

TAX CREDIT FORMS

IRS TAX FORMS
Manufacturers Statements