A water heater is residential energy property.
Q. What improvements qualify for the residential energy property credit for homeowners? (updated April 27, 2021)
A. In 2018, 2019, 2020, and 2021, an individual may claim a credit for (1) 10% of the cost of qualified energy efficiency improvements and (2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during the taxable year (subject to the overall credit limit of $500).
Qualified energy efficiency improvements include the following qualifying products:
- Energy-efficient exterior windows, doors, and skylights
- Roofs (metal and asphalt) and roof products
- Insulation
Residential energy property expenditures include the following qualifying products:
- Energy-efficient heating and air conditioning systems
- Water heaters (natural gas, propane, or oil)
- Biomass stoves (qualified biomass fuel property expenditures paid or incurred in taxable years beginning after December 31, 2020, are now part of the residential energy efficient property credit for alternative energy equipment.)
Residential Energy
