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New Member
posted Apr 14, 2025 12:03:02 PM

I replaced my gas water heater with a heat pump water heater. Why can't I get the home energy credit?

I have owned the house in San Diego since 2002.

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3 Replies
Expert Alumni
Apr 14, 2025 12:07:15 PM

Heat pump water heaters that have earned the ENERGY STAR are eligible for the credit. However, the credit is nonrefundable, so you can't get back more on the credit than you owe in taxes.

 

Energy Efficient Home Improvement Credit

New Member
Apr 14, 2025 12:17:43 PM

I paid almost $4000 for a Heat Pump Water Heater.  I haven't finished my taxes.  I have put the information requested several times and it keeps saying "0 credit."  I don't understand this.  The main reason I purchased such an expensive water heater is because they said it qualified for a 30% tax credit of the purchase and installation costs.

Expert Alumni
Apr 14, 2025 12:33:38 PM

Do you have a tax liability or are you already getting everything back?  The credit is a non-refundable credit which means you must have a tax liability to benefit from it.  You can go back and double check your answers to be sure you answered them all correctly.  

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:
  • 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.