H.R. 1441, titled the Providing Useful Relief for Enhanced Water Act or the PURE Water Act, would create a new nonrefundable tax credit to help households purchase and install home water filtration systems that remove lead, PFAS, and PFOAS from drinking water. The credit is 20% of qualified filtration expenditures for a taxpayer’s primary residence and 10% for qualified expenditures on a secondary (non-primary) residence, with a hard annual cap of $2,500. Any unused credit can be carried forward to future years. The bill also defines what counts as a qualified water filter, what constitutes primary vs. non-primary residence expenditures, and specifies that the credit reduces the basis of the property by the amount of the credit used. The measure would apply to taxable years beginning after December 31, 2024.
Key Points
- 1Credit structure and cap: A household can claim 20% of qualified filtration expenditures for a primary residence and 10% for a secondary residence, but the total credit per tax year cannot exceed $2,500. The credit is nonrefundable (it reduces tax liability but cannot create a refund).
- 2Eligible expenditures and filters: Expenditures must be for a qualified water filter designed to remove at least 90% of lead, PFAS, and PFOAS from drinking water. Maintenance costs and replacement parts for the filtration system do not qualify.
- 3Definitions of eligibility:
- 4- Qualified primary residence filtration expenditure means costs for a filtered system installed in the taxpayer’s home that is their primary residence in the United States.
- 5- Qualified non-primary residence filtration expenditure means costs for a filtered system installed in a secondary residence in the United States.
- 6- Qualified water filter is a system meeting the 90% removal standard for the specified contaminants.
- 7Basis adjustment: The basis (tax cost foundation) of the property is reduced by the amount of the credit claimed, ensuring the credit interacts with the property’s tax basis.
- 8Effective date and status: The amendments apply to taxable years beginning after December 31, 2024. The bill was introduced February 18, 2025, and referred to the Ways and Means Committee.