How to Receive a Tax Credit for a Gas Hot Water Boiler

Installing an energy-efficient gas hot water boiler will not only reduce energy costs, but will also make you eligible for a federal tax credit. Replacing your old hot water boiler with an energy efficient model will provide you with a tax credit of up to $1,500 under U.S. tax laws. The government has an established tax credit program which encourages homeowners to invest in energy-saving "green" products.

Things You'll Need

• New energy-efficient gas hot water boiler (approved model)
• Receipt for new gas hot water boiler
• Manufacturer's certification statement

Instructions

1. Look at the benefits an energy-efficient gas hot water boiler will provide before purchasing a gas hot water boiler. Choosing the correct energy-efficient model will save you much more money. The American Recovery and Reinvestment Act of 2009 offers tax credits for 30 percent of the total cost of energy-efficient products up to a maximum level of $1,500.

2. Find an appropriate gas hot water boiler model to meet the energy requirements as outlined by the U.S. government. Note that all gas hot water boilers with the Energy Star seal are eligible for this tax savings. There are two eligible types of gas hot water boilers, a high efficient gas storage model and a gas condensing model. Both of these models must have a storage volume of between 20 and 100 gallons. They also must meet a 75,000 BTU per hour or less energy consumption requirement. The thermal energy use must be at least 90 percent or the model must have an energy factor of less than 82 percent. The Gas Appliance Manufacturers Association (GAMA) website, noted in the Resources section below, provides information on approved gas hot water boiler models.

3. Purchase and install a new energy-efficient gas hot water boiler. Save your receipts and keep good records of your gas hot water boiler purchase for tax purposes.

4. Locate and keep the Manufacturer's Certification Statement. The IRS recommends saving this certificate to make sure you have purchased the correct product to qualify for the credit. This certification should be included with your purchase. The Internal Revenue Service will not require the certificate to be filed with taxes but they do recommend keeping this certificate with your records.

5. File for a tax rebate using IRS Tax Form 5695. The government will not have form 5695 available until the end of the 2009 tax year. You must claim your energy efficient tax credit when filing your year end taxes. Tax credits are a substantially better benefit than tax deductions. A tax credit of $1,500 will actually lower your taxes by $1,500. Expenses eligible for a tax deduction of $1,500 will only result in a small portion of the $1,500 to be returned to the consumer

Tips & Warnings

• This energy tax credit replaces previous tax credits allowable as set in the Energy Policy Act of 2005. The old policy limited the energy efficient tax credit to a maximum of $500. The new tax credit limit was increased to $1,500.

• This report is meant to serve as a general guideline. Always consult with a tax professional to receive the most up to date tax information.

Resources

• Tax Credit Information
• Gas Appliance Manufacturers Association