Tax credits may be taken advantage of through many types of house improvements, including environmentally friendly and highly efficient heating equipment such as the energy tax credit water heater. However, before you purchase one, make sure the heater you are planning to buy really qualifies for a tax credit.
Homeowners can get a maximum amount of credit for all combined home improvements and this can be as much as $500 for the tax credit’s two-year period. This tax credit is applicable to home improvements made from the 1st of January 2006 through the 31st of December 2007. Because of this, it is a good idea to purchase energy tax credit water heater; you don’t only help the environment, you can also save money from the purchase.
To qualify for tax credit, the energy tax credit water heater should of course have a 0.8 energy factor. This is 33% more efficient compared to the current federal standard. However for this, only a few tankless water heaters are currently qualified. The water heater must also have an accompanying certification statement in order to become eligible. Homeowners who qualified for the tax credit may enjoy a $300 tax credit for energy efficient water heater. However, the $300 tax credit is still subjected to the maximum allowable tax credit for each household which is limited to only $500.
For electric heaters to qualify, the energy factor must be 2.0. This twice efficient compared to the current federal standard. In order to qualify, there should be an accompanying certification statement from the manufacturer. Homeowners who qualified for the tax credit may enjoy a $300 tax credit for energy efficient electrical water heater. However, the $300 tax credit is still subjected to the maximum allowable tax credit for each household which is up to as much as $500.
For solar water heaters to qualify, there should be at least 50% of the energy generated by the property must come from the sunlight. Homeowners can only claim their expenses on the heating system property and not the whole system for the whole household. The water heater must also be Solar Rating and Certification Corporation (SRCC) certified. Homeowners who qualified for the tax credit may enjoy a 30% of the cost of up to as much as $2000 for energy efficient electrical water heater.
Tags: energy star appliance tax credit, water heater tax credit