2016 Tax Credit Tankless Water Heaters

Federal Tankless Water Heater Tax Credits: Retroactive for 2015 and extended through 2016

On December 15, 2015, The Consolidated Appropriations Act of 2015 was signed into law and extends through 2016, the tax credit for residential energy efficiency improvements. This includes purchases of heating, cooling and water heating equipment made in 2015.

Geothermal system tax credits and solar water heaters are unaffected by these changes and remain in place through 12/31/2016.

Note: State, Local and Utility rebates may still be available in your respective markets for residential energy products installed in 2012. Please visit the “Homeowner Resource Center” for a list of energy efficiency tax credits by State.

What you need to know about these tankless water heater tax credits:

Which tankless water heater and other energy efficient equipment is qualified for the tax credit?

High-efficiency water heaters, furnaces, boilers, heat pumps, central air conditioners, building insulation, windows, roofs, biomass stoves, and circulating fans used in qualifying gas furnaces.

What is the tax credit expiration date?

The Consolidated Appropriations Act of 2015 retroactively renewed this tax credit effective January 1, 2015, expiring again on December 31, 2016.

What is the maximum amount that can be received in tax credits?

The maximum tax credits a qualifying homeowner can receive for energy efficiency improvements is $500. If you have made claims for credits of $500 or more for improvements made in 2011 or any years prior, you are not eligible to claim new credits for improvements made during 2012 through 2016.

Does a second home qualify for these tankless water heater tax credits?

No. The energy saving tankless heaters must be installed in the primary residence that is owned and used by the taxpayer.

What do I need to do to apply for this tankless tax credit?

Ask your local contractor who your hire to install your tankless water heater for the right documentation needed to claim the tax credit. You would need the Manufacturer’s Certification Statement and the proper IRS form to file. You can download the proper IRS form 5695.

Is their more information available about these tax credits?

DSIRE™, the Database of State Incentives for Renewables & Efficiency, has more information at the DSIRE website.