Federal Tax Credits on ENERGY STAR Certified Water Heaters
December 8, 2022
If you purchased an ENERGY STAR® certified water heater in 2022, you may be eligible for a tax credit. The existing 25C federal tax credit has been extended through December 31, 2022. The Rheem® Water Heating Division of Rheem Manufacturing Company certifies that the water heating models listed here meet the $300 25C tax credit criteria for ENERGY STAR® certified gas water heaters with UEF>=0.82 and Hybrid Heat Pump Water Heater with UEF>=2.2.
In addition to the 25C federal tax credit, state, local and utility rebates may be available for residential water heating products. Please visit the Rebate Center for a list of energy efficiency tax credits and rebates by state.
Beginning 2023, the expanded version of 25C, now called the Energy Efficient Home Improvement Tax Credit (under the Inflation Reduction Act of 2022), will provide up to $2,000 in tax credits for qualified water heaters as well as credits for electrical upgrades. Unlike the existing program, the expanded 25C tax credit has generous annual limits (not lifetime limits), meaning that the same customer could receive the credit for qualified energy efficient upgrades annually. This expansion will extend the program out to 2032.
Note: The 2023 version of the 25C tax credit is not finalized. Qualifying water heating products and corresponding credit limits will be contingent on finalized CEE (Consortium for Energy Efficiency) product category tiering. Rheem will communicate details on qualified equipment as this information becomes available. Check back in 2023 for updates.
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