In 2011 the maximum deduction on Federal Tax Return for tankless water heaters is $300.
On December 17, 2010 President Obama signed "The Reid-McConnell Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010". This act extended tax credits for qualifying energy-efficient, residential water heaters and boilers placed in service between January 1, 2011 and December 31, 2011. The structure is similar to the "2009-2010 American Recovery and Reinvestment Act", however, the credit amount has changed. Water heaters are still required to have an energy factor >= 0.82 or a thermal efficiency >= 90% to qualify for the federal tax credit in 2011.
Effective Dates:
January 1, 2011 through December 31, 2011.Product Qualifications and Credit Amount for Tankless Water Heaters:
• Energy factor >= 0.82 OR Thermal Efficiency >=90%• Credit Amount: $300
Federal Tax Credit 2011 Guidelines:
• Tankless water heater must be “placed in service” between January 1, 2011 and December 31, 2011. The IRS defines "placed in service" as when the property is ready and available for use. It's not when you purchase product, but the day installation is complete, and you are able to use your new product.• The tax credit is ONLY available for existing homes. Tankless water heater must be installed in an existing home that is also your principal residence in the United States. New construction and rentals do not qualify for federal tax credit.
• There is an overall cap of $500 for fiscal years 2006 – 2011 combined. If you have ever claimed this credit in the past, it counts toward the $500 cap (but does not affect the $1500 limit available for 2009 and 2010). So, for example, if you claimed $300 in 2007, you can only claim $200 in 2011; if you claimed $800 in 2009, you cannot claim any more credit.
How to Claim Your Federal Tax Credit for 2011:
• Purchase and install a qualifying tankless water heater between Jan. 1, 2011 - Dec. 31, 2011• Save your proof of purchase along with a copy of the 2011 Manufacturer’s Certification Statement. A Manufacturer’s Certification Statement is a signed statement from the manufacturer certifying that the product or component qualifies for the tax credit. Most manufacturers provide these Certifications on their website. Taxpayers must keep a copy of the certification statement for their records, but do not have to submit a copy with their tax return.
• For products "placed in service" in 2011, you need to file the 2011 IRS Form 5695 and submit it with your 2011 taxes (by April 15, 2012). On the 1040 form the residential energy tax credit (from Form 5695) is claimed on line 52.
For details about availability of state and local rebates, visit:
