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Federal Tax Credit Certificate

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Non-Business Energy Property Tax Credits Have Been Retroactively Extended Back To January 1, 2019, Through All Of 2020

Good news! The Non-Business Energy Property Tax Credit has been extended through 2020 and made retroactive to cover 2019. The credit amount for Gas, Oil, Propane Water Heaters, including tankless units, is $300.

That means if you installed a qualifying tankless water heater last year, you could get the credit on the return you file in 2020 (for 2019). Of course, any qualifying tankless water heater installed this year would also qualify on taxes due in April 2021.

How it Works

Residential equipment and materials that meet specific standards set by the Department of Energy can qualify for the Equipment Tax Credits for Primary Residences. However, these credits apply only to existing homes and a principal residence. Newly constructed homes or rentals are not eligible.

For this credit, the IRS distinguishes between

Qualified Energy Efficiency Improvements and Residential Energy

Property Costs. “Water Heaters (non-solar)” are a part of Residential Energy Property Costs. All Energy Star-certified tankless water heaters meet the requirements for the Non-Business Energy Property Tax Credit.

Do you have your manufacturer certificate?

To apply, you will need a written certificate that your tankless water heater qualifies for the tax credit.

As soon as the IRS announces an extension of the tax credit, manufacturer certificates are updated and made available on our website

Not sure how to apply for the tax credit from the IRS? You will have to use Form 5695, Residential Energy Credits, on the IRS website. Read more about it here.

Updated on April 13, 2021

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