Can I receive a tax credit for my new furnace?

April 08, 2020

For most families, there always seems to be a lengthy list of home improvement tasks that they want to complete or new ideas they’d like to attempt. While a handful may not be necessities, furnace replacement is a project that might be critical to keeping your home comfortable during the winter months in Lodi.

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

According to ENERGY STAR®, the Non-Business Energy Property Tax Credits were extended through December 31, 2020. In order to obtain the tax credit, you must buy a furnace that has earned the ENERGY STAR label. However, it can’t be a furnace that is labeled ENERGY STAR for “U.S. South Only.” When browsing for furnace replacements, watch for products with the ENERGY STAR rating so you can be certain you’re picking a high-efficiency furnace.

At Tokay Heating and Air Conditioning, we’ll help you choose an option that matches your needs and helps you qualify for this tax credit. While ENERGY STAR products designate high efficiency, you’ll need to clarify that the furnace you select 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 select a new high-efficiency furnace. Many of the most efficient products can save you hundreds of dollars on your energy costs all year long. And your family will also have more confidence in your HVAC system to help your home stay at just the right comfort level.

If you think of questions about your eligibility for a tax credit, or if there are other local savings you could be eligible for by buying a new high-efficiency furnace, give our teams at Tokay Heating and Air Conditioning a call at 209-257-3156. You may also visit ENERGY STAR or contact your local utility organization if you have questions about other eligible home products.