Can I claim energy credit for replacing gas water heater

[frostily0495]

I replaced a very old natural gas water heater (tank) with a new one which is more efficient. Is there any federal or CA state energy efficient credit I can claim for it? 

[Vanessa A]

Yes.  You can claim the federal Home Improvement Energy Efficient Credit if you have a tax liability to bring down and if your Natural Gas Water heater meets government standards for energy efficiency. The credit for the water heater is 30% up to $600. 

For CA, the credits appear to be based on income but you can click on this link and enter your zip code to see if you qualify for any of the local or state credits. 

  The Home Improvement Energy Efficient Credit is a non-refundable credit

• Worth up to 30% of costs with a maximum credit $2,000 for
  • Air source heat pumps
  • Heat Pump Water Heaters
  • Biomass Stoves or Boilers
• Worth up to 30% of qualifying costs for a maximum combined total of $1,200 for the following:
  • Doors, Windows and Skylights
  • Insulation
  • Natural Gas, Oil Propane Water Heaters ($600)
  • Furnaces
  • Boilers
  • Central Air Conditioners ($600 maximum Credit)
  • Electrical Panel Upgrades
  • Home Energy Audit (up to $150)
• You can combine the $2,000 credit with the $1,200 credit for a total of $3,200
• This credit is a use it or lose it credit.  If you do have enough tax liability in the year you buy and install the item, you will not be able to carry the credit forward.
• NOT available for new construction.