How to Qualify a Furnace for Residential Energy Credits
If you have purchased a qualifying furnace, you might be eligible for a residential energy tax credit of up to $1,500 as detailed in The American Recovery and Reinvestment Act of 2009. To qualify for the maximum $1,500 credit, the purchase must have been made and the furnace must have been installed between Jan. 1, 2009, and Dec. 31, 2010, and the furnace must qualify as being energy efficient. In December 2010, Congress extended the credit for energy efficient equipment purchased and installed in 2011, but the credit limit for 2011 installations was reduced to $500. In any case, the furnace must be installed in your principal residence.
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Instructions
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Prior to purchasing your furnace, visit Energystar.gov and IRS.gov to find out what furnaces will qualify as being energy efficient. Generally, natural gas, propane or oil furnaces with at least 85 percent Annual Fuel Utilization Efficiency (AFUE) will qualify. Find links in the References section.
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Once you purchase your furnace, keep all related receipts, including those for labor costs.
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Keep your manufacturer's certification statement that verifies that your furnace qualifies as energy efficient. If you don't have the statement, find it online. Then store it with your receipts. The IRS may request to see it once you file your taxes.
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Download and fill out IRS Form 5695. If you have any questions, contact the IRS or a tax professional.
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Tips & Warnings
The installation of your furnace is included in the credit, which means that you can take a credit of 30 percent of the purchase price and installation cost of your furnace.
