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The Short Answer: Only energy-efficient water heaters that meet Section 25C standards qualify for federal tax credits, while standard plumbing services do not. Logan Services helps Dayton, Columbus, and Cincinnati homeowners choose and install qualifying systems with free estimates and next-day installation.
Tax incentives can make home improvement projects more affordable, but not all plumbing upgrades qualify. If you are considering repairs, replacements, or system upgrades, it is important to understand what the IRS allows under Section 25C of the Energy Efficient Home Improvement Credit. This program rewards homeowners who install equipment that reduces energy consumption, but standard plumbing services are excluded.
At Logan Services, our team serves Dayton, Columbus, and Cincinnati homeowners with expert plumbing and HVAC solutions. Here’s what you need to know about which plumbing upgrades qualify for tax credits—and which ones do not.
Call (800) 564-2611 for trusted plumbing support and guidance on tax credit eligibility.
Plumbing Upgrades That Do Qualify
The only plumbing equipment that qualifies for federal tax credits is an energy-efficient water heater. To be eligible under Section 25C, the unit must meet criteria established by the Department of Energy. Qualifying systems include:
- Heat Pump Water Heaters – Also called hybrid water heaters, these use electricity to move heat rather than generate it, making them two to three times more efficient than conventional electric models.
- High-Efficiency Tankless Water Heaters – Certain tankless units meet the required Energy Factor (EF) or Uniform Energy Factor (UEF) ratings.
The credit applies up to $2,000. This means homeowners in Dayton, Columbus, and Cincinnati can save significantly when upgrading to qualifying equipment.
How Can Homeowners Tell If a Water Heater Qualifies?
Manufacturers label eligible water heaters with ENERGY STAR® certification or list specific efficiency ratings. To verify eligibility:
- Check the yellow EnergyGuide label on the unit.
- Look for ENERGY STAR® certification.
- Ask your installer to confirm compliance with Section 25C requirements.
Working with a trusted installer like Logan Services ensures you select a system that meets both your household’s hot water needs and the federal guidelines for tax credits.
Plumbing Upgrades That Do Not Qualify
Many homeowners assume that any large plumbing project could be tax-deductible. Unfortunately, that is not the case. The following upgrades and repairs are not eligible for credits under Section 25C:
- Pipe Repairs and Replacements – Fixing leaks, upgrading old galvanized lines, or rerouting pipes does not meet federal efficiency requirements.
- Fixture Installations – Replacing sinks, toilets, showers, or faucets improves functionality but does not qualify.
- Drain Services – Clearing clogs or repairing sewer lines falls into standard maintenance.
- Standard Water Heater Installations – If a new unit does not meet the minimum efficiency standards, it is not eligible for a credit.
These services are still essential for comfort, safety, and water conservation in your home, but they do not provide federal tax savings.
Why Standard Plumbing Still Matters
Even though most plumbing repairs are not tax credit eligible, they remain crucial for maintaining home comfort and preventing costly damage. For example:
- Leak repairs save water and prevent structural damage.
- Drain cleaning keeps wastewater flowing safely.
- Fixture upgrades improve water pressure and efficiency.
Homeowners in Dayton, Columbus, and Cincinnati rely on fast, reliable plumbing service to avoid disruptions and protect their property. While these services do not come with tax credits, they often provide immediate savings through lower water bills and fewer emergency repairs.
How to Claim the Water Heater Tax Credit (IRS Form 5695)
Claiming the credit requires filing IRS Form 5695: Residential Energy Credits when you do your taxes. Here’s how to complete the process:
- Save All Documentation – Keep receipts for the purchase and installation of your qualifying water heater. Ask your installer for a copy of the product’s efficiency certification statement.
- Download Form 5695 – Available directly from the IRS website. This form is used to claim residential energy credits.
- Complete Part II of the Form – Enter the cost of your qualified energy-efficient water heater installation. The form will walk you through calculating the credit, up to your system’s limit.
- Transfer the Credit to Your Tax Return – The credit calculated on Form 5695 is then carried over to Schedule 3 of your Form 1040.
- File With Your Annual Tax Return – Submit the completed form and keep all records in case the IRS requests verification.
By following these steps, you ensure you receive the full benefit of the tax credit for your upgrade.
How Logan Services Helps Homeowners Maximize Savings
In addition to federal tax credits, Logan Services helps homeowners in Dayton, Columbus, and Cincinnati save money on plumbing upgrades through special offers, coupons, and seasonal promotions. Our team understands that home improvements can be a major investment, so we make affordability a priority.
Here are ways we help maximize your savings:
- Exclusive Coupons and Discounts – We regularly offer coupons on plumbing and water heater services, helping homeowners reduce upfront costs.
- Seasonal Promotions – Many of our promotions align with seasonal needs, such as water heater upgrades before winter or plumbing service discounts during peak maintenance times.
- Financing Options – For larger projects, our financing programs make it easier to spread out costs while still upgrading to high-efficiency systems.
- Energy-Efficient Recommendations – Our plumbers help you choose the right water heater or plumbing upgrade that qualifies for rebates and tax credits, ensuring you don’t miss available savings.
By combining federal tax credits, manufacturer rebates, and Logan Services’ promotions, homeowners can significantly lower the overall cost of installation. This means you not only improve comfort and efficiency but also protect your budget.
Claim Your Water Heater Coupons Today!
Ready to Upgrade Your Plumbing and Save?
If you’re planning a plumbing upgrade in Dayton, Columbus, or Cincinnati, Logan Services can help you make the most of your investment. From guiding you through federal tax credits to applying local rebates and promotions, our licensed plumbers ensure you maximize savings while upgrading to reliable, energy-efficient solutions.
Call us today at (800) 564-2611 for your free, same-day estimate and next-day installation.
Frequently Asked Questions About Plumbing Tax Credits
No. Toilet replacements and other bathroom fixture upgrades, such as faucets and sinks, do not qualify for federal tax credits. These services are considered standard plumbing improvements. However, Logan Services offers coupons and promotions in Dayton, Columbus, and Cincinnati to help lower the cost of fixture installations.
Yes, but only certain high-efficiency tankless water heaters qualify under Section 25C. Our licensed plumbers can recommend and install models that meet federal energy-efficiency standards, ensuring homeowners in Dayton, Columbus, and Cincinnati maximize their savings.
No. Repairs like pipe replacement, leak detection, and drain cleaning are essential for home safety and comfort, but are not tax credit eligible. Logan Services provides these plumbing services with same-day scheduling to help protect your home and prevent costly water damage.
To claim the credit, save your receipts and efficiency documentation, then file IRS Form 5695 with your federal tax return. Logan Services provides homeowners with the necessary paperwork after installation, making the process straightforward.
Yes. Many Ohio utility companies offer rebates for ENERGY STAR® water heater installations. Logan Services helps Dayton, Columbus, and Cincinnati homeowners identify and apply for available rebates, combining them with tax credits for maximum savings.
The Section 25C Energy Efficient Home Improvement Credits are available through at least 2032. This gives homeowners plenty of time to plan upgrades, though energy-efficient water heaters can start lowering utility bills immediately after installation.
Yes, but only if the property was used as a primary residence during the tax year. Rental-only properties do not qualify. Logan Services works with homeowners and property managers in Dayton, Columbus, and Cincinnati to install efficient water heaters that provide long-term savings.
Homeowners may claim up to $2,000 of the installation cost of a qualifying energy-efficient water heater. This includes both the unit itself and professional installation by a licensed plumber.
