Can I Earn a Tax Credit for My New Furnace?

For many homeowners, there always seems to be a large list of home improvement projects that they want to complete or new ideas they’d like to try. While several may not be required, furnace replacement is a task that may be critical to keeping your home comfortable throughout the winter months in Front Royal.

Buying a new furnace is a large investment. You’ll absolutely realize the return-on-investment on your indoor comfort along with your utility costs, but it might be a little overwhelming at first. The good news is that when you select a new energy-efficient furnace, you might be eligible 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 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, keep an eye out for solutions 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 solution that meets your needs and makes sure you qualify for this tax credit. While ENERGY STAR products indicate high efficiency, you will want to clarify that the furnace you choose has an Annual Fuel Utilization Efficiency (AFUE) greater than 95, in order to qualify for the tax credit. AFUE means the percent of heat produced for every dollar of fuel consumed.

This tax credit will not be the only savings you’ll observe when you purchase a new high-efficiency furnace. Some of the most efficient products can save you hundreds of dollars on your energy costs all year long. And your household will also have higher confidence in your HVAC system to keep your house at just the right temp.

If you come across questions about your eligibility for a tax credit, or if there are other local savings you may be eligible for by installing a new high-efficiency furnace, give our technicians at Dave's Diversified Services a call at 540-636-3396. You can also visit ENERGY STAR or contact your local utility company if you have questions about other eligible home products.