Tankless Water Heater Tax Deduction

The credit amount for gas oil propane water heaters including tankless units is 300.

Tankless water heater tax deduction.

A tankless water heater tax credit is a government s tax credit to citizens who take advantage of switching to a more energy efficient tankless hot water heater. For the tax year 2020 the credit drops to 26 percent and for the tax year 2021 the credit drops to 22 percent. Gas tankless models are a great choice for new construction and major remodeling but are also becoming popular as a replacement for gas. Energy star certified gas tankless water heaters cut water heating expenses while also providing continuous hot water delivery.

Water heaters account for 12 of the energy consumed in your home. Certain energy star certified gas water heaters meet the requirements for this tax credit. Gas oil propane water heater. Federal income tax credits and other incentives for energy efficiency.

300 requirements uniform energy factor uef 0 82 or a thermal efficiency of at least 90. Can i deduct installing a tankless water heater yes if it meets the requirements you can get up to a 300 tax credit for 2015. The tax credit for builders of energy efficient homes and tax deductions for energy efficient commercial buildings have also been retroactively extended through december 31 2020. The non business energy property tax credit has been extended through 2020 and made retroactive to cover 2019.

Tankless water heater tax credits are often part of an initiative to improve a nation s overall carbon footprint or lower average energy use through the tax code. Qualifying water heaters include gas oil and propane units with an energy factor overall efficiency of 0 82 or more or a thermal efficiency of at least 90 percent. That means if you installed a qualifying tankless water heater last year you could get the credit on the return you file in 2020 for 2019. This credit is worth a maximum of 500 for all years combined from 2006 to its expiration.

Tax credits for residential energy efficiency have now been extended retroactively through december 31 2020. These types of hot water heaters have been around for a while and many models offer a less energy consuming option for keeping a home supplied with hot water. For the tax years 2017 through 2019 you can claim 30 percent of the cost of your solar water heater system which includes the cost of installation. Of that combined 500 limit a maximum of 200 can be for windows.