High Efficiency Water Heaters

Up to $1,500 in Water Heater Tax Credit

High efficiency water heaters are not just environmentally sound—over the course of their life-cycles, they can also help homeowners save a lot of money. Due to a recent extension of residential tax credits for energy-efficient improvements, several American high efficiency water heater models are now eligible a tax credit of up to 30% (with a cap of $1,500) of the purchase and install price.

How Is The Tax Credit Calculated?

There are important limitations on this tax credit. First, this is a single tax credit that can be used on a variety of “qualifying energy improvements” and “property expenditures.” You may claim a maximum of 30% (with a cap of $1,500) of all of your “qualified energy improvements” or “property expenditures.” That means, if you purchase and install a qualifying furnace and claim $700 of the tax credit for the purchase and installation of your furnace, you have only $800 of the tax credit left to claim on your other qualifying expenditures. However, you can use the entire credit on a single product and installation. Second, the credit is limited to $1,500 for tax years 2009 and 2010 combined. If you claim all $1,500 on qualifying expenditures in 2009, you have used up the tax credit and cannot claim anything on your 2010 tax return; if you use only $900 in 2009, you may still claim the remaining $600 in 2010 for qualified products.

How Do I Get My Tax Credit?

To get your tax credit, you must purchase—and put an eligible American water heater into service in your primary residence between January 1, 2009 and December 31, 2010. Save your receipt and use IRS 2009 Tax Form 5695 (available in late 2009 or early 2010) to claim your credit on your 2009 or 2010 tax return.

Which Models Are Eligible?

American Polaris models and On-Demand units that boast thermal efficiency of 90% or higher or an EF value of .82 or higher are eligible for this offer.

Eligible Models

All Polaris and On-Demand models listed on this page qualify for the tax credit when installed in a residential application by December 31, 2010.