Providing Useful Relief for Enhanced Water Act or the PURE Water Act

This bill establishes a new nonrefundable federal tax credit for 20% of the cost of a water filter used in a primary residence located in the United States (or 10% of the cost for a water filter used in a non-primary U.S. residence). (Limitations apply.)

Under the bill, the tax credit is limited to $2,500 in a tax year. However, the bill allows the amount of the tax credit in excess of the annual maximum amount to be carried forward to the succeeding tax year.

To qualify for the tax credit, the water filter must be a home water filtration system with the purpose of removing from drinking water at least 90% of (1) lead, (2) per- and polyfluoroalkyl substances that contain at least one fully fluorinated carbon atom (PFAS), and (3) perfluorooctanoic acid (PFOA).

Finally, under the bill, the increase in the basis of the residence (the value of the residence for federal tax purposes) due to the water filter excludes the amount of the allowed tax credit.