Boiler Tax Credit

A US homeowner that replaces an older less energy efficient boiler this year can receive a federal tax credit. The tax credit will reduce the amount of income tax an individual or couple will have to pay in 2011.To get this tax credit the boiler will have to be installed in an existing home that is the taxpayer’s primary residence. This means the home that the taxpayer lives in most of time. The tax credit can’t be used in a second home such as a cabin or a vacation home.

Unfortunately the tax credit does not apply to new homes or to rental properties that a person owns. Another limitation is that a homeowner will only be able to claim one of these tax credits in 2010.

To get this tax credit a person will have to install the new boiler by December 31, 2010. It is possible that Congress will extend this tax credit for 2011 but that hasn’t happened yet. If you want to make sure you get the tax credit you’ll have to install a new boiler this year.

Tax Credit Details

The tax credit will take 30% of the cost of the boiler off of a person’s income tax amount for the year 2010. The maximum amount that a person can take off of their taxes using this credit is $1,500.This could still add up to considerable savings with the cost of new boilers running around $3,000 and up. The average person who replaces a boiler would probably be able to claim the whole $1,500 tax credit on their 2010 tax return.

Qualifying for the Tax Credit

The main requirement to get this tax credit is that the new boiler installed will be an energy efficient or renewable energy product. Since most new boilers are energy efficient products they should qualify for the boiler tax credit.

Boilers that have an Energy Star rating for efficiency will not automatically qualify for this tax credit. The Energy Star is the federal government’s certification for energy efficiency. This means that you may have to check with the IRS to see if a particular model or make of boiler is considered “energy efficient.”A renewable energy product means a product that burns something other than natural gas, propane, coal, or traditional fuel oil. Wood burning boilers, pellet boiling boilers and boilers that burn waste oil should qualify. Boilers that burn both a traditional fuel source such as propane or natural gas and a renewable source such as wood should also qualify.

The other major requirement for this tax credit is home ownership. You will have to own the home you are installing the boiler in and use it as your principal residence. This means that rental properties and vacation homes don’t qualify.A person who lives in a unit of an apartment or duplex building that they own while renting other units could possibly qualify for this credit as well. Such an individual would have to check with the IRS or their tax preparer to see if they qualify for the credit.


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