How to Receive a Tax Credit for a Gas Fueled Water Heater
There are many types of water heaters available on the market today. The U.S. federal government provides taxpayers with incentives to purchase energy efficient water heaters. New gas fueled water heater purchases qualify homeowners for a year-end credit on their U.S. taxes. This program was created as part of the U.S. energy conservation program to encourage the purchase of energy efficient products.
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Things You'll Need
- New gas fueled water heater (approved model)
- Receipt for new gas fueled water heater
- Manufacturer Certification Statement
Instructions
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Research and understand which energy efficient gas fueled water heater models currently meet the specific energy requirements for this tax credit. Just because a model has an energy star rating does not mean that it qualifies for the program. Government specifications for energy efficient gas fueled water heaters are more stringent than some energy star-rated models.
As of May 2009, acceptable models must have an energy factor greater than or equal to .82 or a 90% thermal efficiency rating. Visit the Energy Star website (see Additional Resources) to review current guidelines for qualifying product specifications. -
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Purchase and and install a qualifying gas fueled water heater. Keep a record of your purchase and save all receipts. The IRS recommends saving the Manufacturers Certification Statement on your energy efficient product investment. This certification should be included with your purchase.
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Use U.S. Tax Form 5695 to file for your tax credit. Fill out and file Form 5695 with your regular yearly federal taxes. This form includes credit information on all eligible energy-efficient products.
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Tips & Warnings
The tax credit is limited to 30 percent of the total cost of the energy efficient gas fueled water heater, up to $1,500 per year. If you do not meet the $1,500 limit for the qualifying tax year, you may be eligible for additional rebates on other products. See Additional Resources for other energy credit opportunities.
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.
References
Resources
- Photo Credit morguefile.com
