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Congress has extended the tax credit available to purchasers of highly efficient water heating products for another year. For 2011, consumers can take a 10% tax credit, up to $300, for qualifying water heaters. This extension runs until the end of the year.
The tax credit cap has been reduced from $1,500 to $500 ($300 for water heaters). This cap is on the total amount of credits a homeowner can claim from 2006 through 2011. If homeowners have already claimed over $500 worth of credit through those years, they would be unable to do so for 2011.
If you are in the market for a new water heater, we have compiled a list of quality suppliers with approved units.
Please consult a tax professional for additional information regarding the tax credit.