Tankless Water Heater Tax Credit View Models >>
$300 Home Energy-Efficiency Improvement Tax Credit
The new $300 Energy Tax Credit Bill applies to energy efficient gas water heaters with an energy rating of 0.80. Keep your receipt proving the purchase of the qualifying water heater. For your tax records, retain a copy of the Manufacturer Certification for Tax Incentive The Energy Tax Credit starts January 1, 2006 and will continue through December 31, 2007.
For more information on the bill, please visit these sites:
What is a tax credit? You do not receive an income tax credit when you buy the product, like an instant rebate. You claim the credit on your federal income tax form at the end of the year. The credit then increases the tax refund you receive or decreases the amount you have to pay. Tax credits vs. tax deductions. In general a tax credit is more valuable than a similar tax deduction.
A tax credit reduces the tax you pay, dollar-for-dollar. Tax deductions such as those for home mortgages and charitable giving, for example lower your taxable income. If you are in the highest 30 percent tax bracket, your income tax is reduced by 30 percent of the value of a tax deduction. But a tax credit reduces your federal income tax by 100 percent of the amount of the credit.