Can I earn a tax credit for my new furnace?

April 08, 2020

For most homeowners, there typically seems to be a long list of home improvement to-do’s that they need to complete or new ideas they’d like to try. While a handful may not be required, furnace replacement is one project that could be vital to keeping your home comfortable throughout the winter months in Huntingburg.

Getting a new furnace is a great investment. You’ll certainly see the return-on-investment on your indoor comfort as well as your energy costs, but it might be a bit daunting at first. The good news is that when you select a new energy-efficient furnace, you could be approved for a federal tax credit.

According to ENERGY STAR®, the Non-Business Energy Property Tax Credits were pushed through December 31, 2020. In order to obtain the tax credit, you are required to purchase a furnace that has earned the ENERGY STAR label. It cannot be a furnace that is labeled ENERGY STAR for “U.S. South Only.” When looking for furnace replacements, watch for heat pumps with the ENERGY STAR rating so you can be confident you’re picking a high-efficiency furnace.

At Dearing's Service & Solutions, we’ll help you choose a solution that fits your needs and ensures you qualify for this tax credit. While ENERGY STAR products designate high efficiency, you will want to check the furnace you pick has an Annual Fuel Utilization Efficiency (AFUE) greater than 95, in order to qualify for the tax credit. AFUE represents the percent of heat produced for every dollar of fuel consumed.

This tax credit is not going to be the only savings you’ll find when you purchase a new high-efficiency furnace. Some of the most efficient models can save you hundreds of dollars on your energy bills throughout the year. And you’ll also have greater confidence in your HVAC system to maintain your indoor space at just the right temperature.

If you think of questions regarding your eligibility for a tax credit, or if there are other local savings you might be eligible for by purchasing a new high-efficiency furnace, give our experts at Dearing's Service & Solutions a call at 812-200-5844. You may also visit ENERGY STAR or contact your local utility establishment if you have questions about other eligible home products.