Federal Tax Credit
Save up to $2,000 - Federal Tax Credit on Heat Pump Water Heater Projects
Offers and Eligibility are subject to change. Please work with a tax professional to review your eligibility
Federal Tax Credit
TAX CREDIT
30% of the costs up to $2,000
LAYERABLE?
Yes
INCOME QUALIFYING?
NoREQUIREMENTS:
Requirements for 25C Energy Efficiency Home Improvement Residential Tax Credits under the Inflation Reduction Act (IRA)
Eligible for 30% of costs, including labor, up to yearly maximum limit of $2,000 for heat pump water heater installs on existing home, and not for a newly constructed home.
Note: We expect the 25C tax credits to expire on December 31, 2025, based on HR1 (OBBB). The IRS website has not yet been updated, we're monitoring closely and will update the information as soon as official guidance changes.
The total annual credit limit may be up to $3,200 for 25C tax code, which will allow the annual $2,000 limit for heat pump water heaters to be paired with the annual $1,200 limit for building envelope improvements. Refer to the IRS Fact Sheet for latest information. IRS Fact Sheet