What are qualified costs for Natural Gas, Propane, or Oil Water Heaters?
Qualified costs generally include:
To qualify for the credit:
- The purchase price of the water heater (natural gas, propane, or oil) that meets the IRS and Department of Energy efficiency requirements.
- Labor costs for onsite preparation, assembly, or installation. For example, connecting the unit to your home's plumbing and fuel lines.
- Necessary piping, wiring, and related materials directly used in the installation.
To qualify for the credit:
- The water heater must be installed in your principal residence in the United States.
- Produced by a manufacturer that is qualified and listed with the IRS.
- It must meet specific energy efficiency standards . For example, having an annual fuel utilization efficiency (AFUE) or thermal efficiency rating that meets or exceeds the IRS's required threshold.
- The installation must be completed and placed in service during the tax year for which you are claiming the credit.
