topic Can I get a tax credit for a new electric water heater (installed in July 2020) under "Energy-Efficient Building Property"? in Deductions & credits

Can I get a tax credit for a new electric water heater (installed in July 2020) under "Energy-Efficient Building Property"?

jennrikas — Mon, 01 Mar 2021 15:10:52 GMT

Re: Can I get a tax credit for a new electric water heater (installed in July 2020) under "Energy...

MayaD — Mon, 01 Mar 2021 15:48:38 GMT

To qualify for the credit:

This must be used for your primary residence (you live here full-time).
It cannot be used for a new home or a rental.
The water heater must be ENERGY STAR certified to qualify for the home energy improvement tax credit.
More eligibility requirements can be found here.

To claim the credit on your return:

Login to your account.
Select Federal from the left Menu.
Go to Deductions and Credits.
Scroll down to Your Home.
Click Start next to Home Energy Credit.

Re: Can I get a tax credit for a new electric water heater (installed in July 2020) under "Energy-Efficient Building Property"?

Opus 17 — Mon, 01 Mar 2021 16:14:16 GMT

It must be "An electric heat pump water heater that yields a Uniform Energy Factor of at least 2.2 in the standard Department of Energy test procedure." A standard electric hot water heater will not qualify. The credit is 10% of the cost, including installation, up to $300. There is also a $500 lifetime maximum for this credit that may limit your credit if you claimed it before.

In Turbotax, the first part of the home energy credit only discusses alternative energy sources (solar, etc.). Click Next or Continue, and the next page will include the hot water heater.

Re: Can I get a tax credit for a new electric water heater (installed in July 2020) under "Energy-Efficient Building Property"?

Opus 17 — Mon, 01 Mar 2021 16:17:39 GMT

@MayaD

For the nonbusiness energy property credit and the residential energy efficient property credit, the only items that require Energy Star ratings are a geothermal heat pump, a roof designed to reduce heat gain, and doors, windows and skylights. Other energy efficient improvements must meet different standards depending on the type of improvement. See the instructions to form 5695.

https://www.irs.gov/instructions/i5695#idm140333588564912