Hot Water Heater

[agentpotter]

I replaced my hot water heater this year.  Does it qualify for the energy efficient tax credit?  I'm so confused.

[HelenaC · Accepted solution]

The key is, they have to have an Energy Star Certification. If you received an Energy Star Certification from your installer or your water heater has the Energy Star Certification on it, you qualify.  

For Non-solar water heaters to qualify for the Energy Credit, ENERGY STAR certified electric water heaters meet the requirements for this tax credit, as do certain ENERGY STAR certified gas water heaters. 

Tax Credit Amount:  $300

Requirements:
Electric heat pump:
Energy factor > 2.0

Gas, oil or propane:
Energy factor > 0.82 or Thermal efficiency of at least 90%

See definitions

• Must be installed in your "principal residence" between January 1, 2011 and December 31, 2016.

• Must have an Energy Factor at least 2.0.

  New construction and rentals do not apply.

  There is no tax credit for electric storage tank or electric tankless water heaters, nor can they earn the ENERGY STAR. Why not?

• All ENERGY STAR certified Electric Heat Pump Water Heaters qualify for the tax credit.
  

To enter your energy improvement:

1. Open your return, if you don't already have it open.
2. In TurboTax, search for energy improvements. (Do not search for "energy credit," as this will take you to the wrong place in the program.)
3. Click the "Jump to" link in the search results.
4. At the bottom of the Energy-Saving Home Improvements screen, answer Yes and continue. Follow the on-screen instructions.

[tiwillti]

What do you think about EcoSmart ECO 27 water heater? Is it worth buying? 

[Anonymous]

I tried your suggestion and did not find a place in Turbo Tax Deluxe to enter data for purchase of qualifying electric heat pump water heater.  There is a page for "Energy Savings Improvements" and "... Additional Energy Efficient Improvements", but neither has a place for water heaters.

[PattiF]

The electric heat pump water heater is included in the Energy-Efficient Building Property. If you click on the Learn More link, it will be listed there.

The electric heat pump hot water heater is included on page 3 at the top of the left column of Instructions for Form 5695