Can I earn a tax credit for my new furnace?

April 08, 2020

For many homeowners, there usually seems to be a long list of home improvement tasks that they would like to get done or new ideas they’d like to attempt. While a handful may not be necessities, furnace replacement is one project that may be key to keeping your home comfortable throughout the cooler months in Front Royal.

Getting a new furnace is a sizeable investment. You’ll certainly recognize the return-on-investment on your indoor comfort in addition to your energy costs, but it could be a tad overwhelming at first. The good news is that when you pick a new energy-efficient furnace, you could be eligible for a federal tax credit.

According to ENERGY STAR®, the Non-Business Energy Property Tax Credits were prolonged through December 31, 2020. In order to receive the tax credit, you must select a furnace that has earned the ENERGY STAR label. Keep in mind it can’t be a furnace that is labeled ENERGY STAR for “U.S. South Only.” When browsing for furnace replacements, look for heat pumps with the ENERGY STAR rating so you can be sure you’re picking a high-efficiency furnace.

At Dave's Diversified Services, our team can help you select a product that matches your needs and ensures you qualify for this tax credit. While ENERGY STAR products indicate high efficiency, you’ll need to confirm 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 get a new high-efficiency furnace. A lot of the most efficient furnaces can save you hundreds of dollars on your utility costs all year long. And your household will also have higher 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 further local savings you may be eligible for by purchasing a new high-efficiency furnace, give our technicians at Dave's Diversified Services a call at 540-369-3971. You could also visit ENERGY STAR or contact your local utility company if you have questions about other eligible home products.