Confirmation please!

[JG EA]

I asked the question, client had no idea about any energy credits. Put the numbers on Form 5695 and now am second guessing.

Client purchase the "best hot water heater" they had for $300. It has the words on it "energy efficient".

Q: Is that good enough? Do they need a real paper certificate.

Confirmation: If it is good enough does the gov actual cover the cost of this purchase (in this case). It seems too good to be true.

[Snaggletooth]

Too Good

Yes, it is too good to be true.

The good news is that from what I can tell from the publication and
TTB, the water heater qualifies.

The bad news is that the credit is limited to 10% of the cost, or
$15, whichever is smaller, according to the line item instructions.

Someone correct me if I'm wrong. I would like JGs client to enjoy
a better fate if possible.

[August @ ADG Financial]

Correct me if I'm wrong. The credit is for a Water Boilers not a Water Heaters. There is a difference. A Water Boiler goes on a oil or gas furance. a Water Heater is a stand alone unit. Am I right or wrong. No credit for Water Heaters.

[DonPriebe]

Confusion on energy!

I agree that it's probably too good to be true, but for the exact opposite reasons. ;-)

The good news: Water heaters are "Residential energy property". They go on line 5a of the form. The credit is equal to the cost up to $300. That cost includes installation. There is no 10% factor - that is for "Energy efficiency improvements" on line 2. So if his $300 water heater qualifies, it is free!

The bad news: To qualify, a water heater must be a natural gas, propane or oil heater having an energy factor (efficiency) of at least 80%. A casual look at the Lowes web site shows that most gas heaters have an efficiency of 59% - some with cute 'energy' names get up to 62%. I couldn't find ANY gas heaters that qualified.

Ref - the instructions for Form 5695, which are pages 3 thur 6 of the form. http://www.irs.gov/pub/irs-pdf/f5695.pdf

[DonPriebe]

More than you wanted to know about water heaters ...

From the government EnergyStar website ...

"Only some tankless water heaters currently qualify. This is over 33 percent more efficient than the current federal standard."

http://www.energystar.gov/index.cfm?c=products.pr_tax_credits#chart

[August @ ADG Financial]

The posted chart is great tool. I see that some stand alone water heaters are approved. Thanks for the posting!

[JG EA]

Thanks

Thanks for all the replies, this helps so much. Especially Don thanks for the great website and charts, that will prove to be invaluable. I can see on the Water Heater page that it also says to save your receipt and the Manufacturer's Certification Statement. That mean there is a Certification Statement and that will make this whole questioning clearer and to the point.

Incidently I've been saying Hot Water Heater all my life. NO. They are Water Heaters or Cold Water Heaters. (Although I suppose they do heat hot water also to keep it hot.)

JG