AMERICANS have been notified of a little-known payment worth thousands that they could be eligible for after meeting specific criteria.
The financial compensation specifically pertains to homeowners, those with operational heat pump water heaters that are Energy Star certified.
It’s known as the Heat Pump Water Heaters Tax Credit and applies to residents who bought and installed their product within the time frame of January 1, 2023, until December 31, 2032, per Energy Star’s website.
Homeowners could potentially be awarded 30% of the costs to put in the Energy Star-certified heat pump water heater, with a maximum amount of $2,000 per project.
Only principal residence homeowners can use and be eligible for the credit, and they must be located within the United States.
The heat pump water heater must also be located and installed at an existing home that serves as the resident’s primary living space.
Read More on Direct Payment
The Heat Pump Water Heaters Tax Credit will not apply for rental properties or new construction.
Several types of properties aside from a standard house could still qualify if it is the primary residence of an applicant, according to Energy Star.
For example, a “houseboat, mobile home, cooperative apartment, condominium, and a manufactured home” could be acceptable.
The direct payment is part of the government’s Energy Efficient Home Improvement Tax Credits to assist environmentally conscious Americans.
Most read in Money
There is an annual aggregate limit for homeowners on how much they can obtain from the tax credits when it comes to the installation of Energy Star products or home improvement projects to save energy.
That limit is set at $3,200.
So, homeowners could already be the majority of the way to the limit with a $2,000 payment for an Energy Star heat pump water heater, biomass boilers or stoves, or other products.
It’s also important to note that those Americans with geothermal heat pumps are still eligible for a tax credit — but it falls under a separate category from standard heat pumps.
ADVICE AND CLAIMING PROCESS
Energy Star advises homeowners that the best way to get the most out of the Energy Efficient Home Improvement Tax Credits is to spread out their projects “over a few years.”
If installing a heat pump water heater, it is recommended that homeowners do that for the $2,000 credit and then add the insulation for a credit of $1,200, reaching the yearly limit.
A heat pump could also be paired with window or door replacements to get to the cap of $3,200.
Those who have an eligible Energy Star product and are looking to claim a potential credit would need to include their information on the taxes for the year the upgrades are made.
Projects completed this year would then need to be noted in 2024 taxes.
IRS Form 5695 is required and can be obtained through Energy Star’s website.
Energy Star also stressed that claimants cannot get back more from the credit than they owe in taxes for the year.
Read More on The US Sun
For more related content, check out The U.S. Sun’s coverage on Child Tax Credit payments of $3,500 going out this spring.
The U.S. Sun also has the story on a tax boost of around $12,076 available for some Americans.
11 total views, 1 views today