The PURE Water Act creates a tax credit for individuals who install qualified water filters in their homes, covering 20% of costs for a primary residence and 10% for a secondary residence, up to $2,500 annually.
Ritchie Torres
Representative
NY-15
The PURE Water Act introduces a tax credit for individuals who install certified water filters in their homes. This credit covers a percentage of the costs for filters that remove at least 90% of lead, PFAS, and PFOA from drinking water in primary and secondary residences, with a maximum credit of $2,500 annually. Unused credits can be carried forward, but the property's value increase is reduced by the credit amount received. This act aims to encourage the adoption of water filtration systems, ensuring safer drinking water for households.
New Tax Credit for Water Filters: 20% Off for Cleaner Water Starting 2025
The Providing Useful Relief for Enhanced Water Act, or PURE Water Act, is pretty straightforward: it gives you a tax break for installing water filters in your home that specifically remove lead, PFAS, and PFOA. Think of it as the government chipping in to help you get cleaner water, starting with your taxes filed in 2025.
Cash Back for Clean Water
This bill introduces a tax credit, meaning it directly reduces the amount of taxes you owe. Here’s the deal:
- Primary Residence: If you install a qualifying filter in the home where you live most of the time, you can get 20% of the cost back as a tax credit.
- Secondary Residence: For a vacation home or rental property, the credit is 10% of the cost.
- Cap: The maximum credit you can get in a year is $2,500. If your credit is more than your tax bill, you can carry the leftover credit to the next year.
For example, if you're a homeowner and spend $1,000 on a qualifying filter system for your main house, you get a $200 tax credit (20% of $1,000). If you own a cabin and install a filter there, that same $1,000 system gets you a $100 credit (10% of $1,000).
What Counts as a "Qualified" Filter?
Not just any filter will do. The bill is specific: it has to remove at least 90% of lead, PFAS, and PFOA from your drinking water (Section 2). These are chemicals linked to health problems, so the focus is on getting rid of them. Keep in mind, the credit doesn't cover maintenance or replacement parts – just the initial system cost.
The Fine Print
There's one important detail to remember. If you take this credit, the amount you get back reduces the "basis" of your property by the same amount. The basis is essentially what the IRS considers your home's value to be, which matters when you eventually sell. For most people, this won't make a huge difference, but it's something to be aware of.
Real-World Ripple Effects
This bill aims to make clean water more accessible, but it's worth thinking about who benefits most. The credit is helpful if you have the cash to buy and install a filter system in the first place. Think about a family renting an apartment – they might not have the option to install a whole-house system, even with a tax credit. Or consider a small business owner who's already stretched thin; finding extra money for a high-end filter might be tough. On the other hand, homeowners with more disposable income, and especially those worried about water quality, are more likely to jump on this. It could also be a boost for companies that make and install these filters.
While the PURE Water Act is a step toward cleaner water, its real-world impact will depend on who can actually afford to take advantage of it. And, since it's a tax credit, you need to have a tax liability to benefit – if you don't owe much in taxes, the credit won't do much for you.