As provided for under the "Federal Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010" signed into law on December 17, 2010, the U.S. Internal Revenue Service (IRS) now provides consumers with federal tax credits on home improvements including specified energy-efficient home improvements including qualifying, residential water heaters, placed in service from January 1, 2011 through December 31, 2011 in a homeowner's primary residence, and meet the criteria of "Qualified Products" as set forth by Section 25C of the Internal Revenue Code.

The tax credit for qualifying energy improvements such as the installation of Noritz tankless water heaters, Buderus boilers, or Tempstar HVAC products is 10% of the full purchase and installation price up to a maximum credit of $300.

For more information on the bill, check out the U.S. Department of Energy website.

Connecticut Furnace and Boiler Replacement Rebate Program

The Furnace Replacement Rebate Program is an incentive program for Connecticut households to replace their existing residential furnaces or boilers with more energy efficient models. The program is designed to provide rebates of up to $500 to households that purchase and install replacement natural gas, propane or oil furnaces and boilers between July 1, 2007 and June 30, 2017. Listed below are some of the Furnace Replacement Rebate Program highlights. Please download the complete Furnace Replacement Rebate guidelines and application materials to view all eligibility criteria.

For more information on the the Connecticut rebate program click here.

What is a tax credit?

A Tankless Water Heater Tax Credit is not received when you buy the product, like an instant rebate. A Tax Credit on Water Heaters is claimed 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 paid in.

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 10 percent tax bracket, your income tax is reduced by 10 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.

For more information on Federal Tax Credits for Energy Efficiency, click here.