Please Note: For State and Local Rebates, visit the Database of State Incentives for Renewables & Efficiency website at www.dsireusa.org or contact your local utility provider.

On January 1st, 2013, Congress decided to reinstate the 25C tax credits for highly efficient HVAC and water heating equipment. These tax credits, originally expired at the end of 2011, are now extended until December 31st, 2013. This bill is also retroactive, meaning that those qualifying water heaters installed after December 31st, 2011 are now eligible for the tax credit.

The amount of the tax credit is 10% of the total installation cost of the water heater or boiler (labor plus cost of the unit). The maximum tax credit is $300 for water heaters and $150 for boilers.

  • Tax credits have been extended to 2013.
  • Water heater tax credits are limited to a maximum of $300.
  • Boiler tax credits are limited to a maximum of $150.
  • If a new home is being built, the tax credit cannot be claimed. It needs to be existing equipment that is being replaced.
  • Tax credit is for a taxpayer's principal residence only.

For more information, go to www.energystar.gov.

Qualifying Water Heaters

  • All natural gas, propane gas, or oil water heaters with an Energy Factor rating greater than, or equal to 0.82, or a thermal efficiency rating of at least 90%.
  • Electric heat pump water heaters with an Energy Factor of at least 2.0.

Qualifying Boliers

  • Natural gas, propane or oil boilers with an AFUE rating of 95% or better

Examples

If a homeowner had a qualifying water heater installed that cost $3,000 (installation and water heater), then the homeowner could claim a tax credit of $300.

  • Cost of installation and water heater ($3,000) x tax credit (10%) = $300.

If a homeowner had a qualifying water heater installed that cost $5,100 (installation and water heater), then the homeowner could still only claim a MAXIMUM tax credit of $300.

  • Cost of installation and water heater ($5,100) x tax credit (10%) = $300. This is greater than the maximum allowable tax credit, so the homeowner could only claim $300.

As always, please contact the Product Department at 1-800-523-2931, if additional clarification is needed.