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Does a tankless natural gas water heater qualify for an energy-saving home improvement tax credit in 2018?

 
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1 Reply
TomK
Expert Alumni

Does a tankless natural gas water heater qualify for an energy-saving home improvement tax credit in 2018?

Unfortunately, no.  However, some states still do allow for such energy credits.

Nonbusiness Energy Property Tax Credit (Expired December 31, 2017)

For tax years prior to 2018, equipment and materials can qualify for the Nonbusiness Energy Property Credit only if they meet technical efficiency standards set by the Department of Energy. The manufacturer can tell you whether a particular item meets those standards. For this credit, the IRS distinguishes between two kinds of upgrades.

The first is "qualified energy efficiency improvements," and it includes the following:
  • Home insulation
  • Exterior doors
  • Exterior windows and skylights
  • Certain roofing materials
The second category is "residential energy property costs." It includes:
  • Electric heat pumps
  • Electric heat pump water heaters
  • Central air conditioning systems
  • Natural gas, propane or oil water heaters
  • Stoves that use biomass fuel
  • Natural gas, propane or oil furnaces
  • Natural gas, propane or oil hot water boilers
  • Advanced circulating fans for natural gas, propane or oil furnaces

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