New Water Heater? Boston Homeowners Get A Tax Credit For That

As I mentioned last week, the federal government has extended the tax credit available for the installation of non-solar water heaters in Boston homes. The credit, which applies only to certain high-efficiency water heaters will put as much as $300 back in your pocket, if you claim the credit by December 31, 2011. What qualifies? Any gas, propane, or oil-fired water heater with an energy factor of at least .82 or a thermal efficiency of at least 90% (including tankless models) qualifies for the break. Electric heat pump water heaters with an energy factor of at least 2.0 also qualify. This program falls under the federal cap of $500 for energy efficient improvements made between 2006 and 2011, so if you’ve already claimed certain expenses under this program, your credit may be reduced or eliminated.

Note that standard electric water heaters and solar water heaters are specifically excluded from this program, so check the rules at http://www.energystar.gov before you buy. As with last year’s tax credit program, even highly efficient electric water heaters don’t generate enough energy savings to qualify for the credit. Solar water heaters are also exempt for the same reason, but if you want to install a solar water heater and you can go without the tax credit, contact us and we’ll be happy to talk about your options.

To claim your credit, you’ll need to put the device in service in 2011 in your primary residence. New construction, rental properties and second homes don’t qualify. You’ll also need to file IRS Form 5695 when you prepare your taxes next April. Don’t forget to save your receipt(s) and the Manufacturers’ Certification Statement with your records!

If you’re ready for more tax-friendly home improvements, consider adding a natural gas, propane or oil furnace. You can claim a tax credit of $150 if the furnace you install has an Annual Fuel Utilization Efficiency (AFUE) rating of 95 or better. If your home uses a boiler, you can get the same $150 credit for any gas, propane or oil boiler with an AFUE rating of 95 or better.

Of course, the experts at Boston Standard Plumbing & Heating are ready to help with any repair, installation or maintenance issues you may encounter with your home heating, cooling or plumbing systems. Whether you need an emergency repair or just some good advice, contact us at (617) 288-2911 and we’ll be happy to help.