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Can I earn a tax credit for my new furnace?

April 08, 2020

For many families, there typically seems to be a large list of home improvement tasks that they need to do or new ideas they’d like to give a shot. While a handful may not be necessary, furnace replacement is a project that could be critical to keeping your home comfortable throughout the winter months in Anchorage.

Selecting a new furnace is a big investment. You’ll certainly feel the return-on-investment on your indoor comfort in addition to your energy bills, but it could be a bit daunting at first. The good news is that when you shop for a new energy-efficient furnace, you may be eligible 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 get the tax credit, you must purchase 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 researching furnace replacements, watch for heat pumps with the ENERGY STAR rating so you can be confident you’re choosing a high-efficiency furnace.

At Discount Mechanical Heating & Plumbing Services, our team can help you determine a product that meets your needs and helps you qualify for this tax credit. While ENERGY STAR products designate high efficiency, you’ll need to check the furnace you choose 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.

Qualifying for the tax credit is not going to be the only savings you’ll find when you buy a new high-efficiency furnace. Some of the most efficient furnaces can save you hundreds of dollars on your energy bills all year long. And you’ll also have higher confidence in your HVAC system to maintain your indoor space at just the right comfort level.

If you come across questions regarding your eligibility for a tax credit, or if there are additional local savings you might be eligible for by installing a new high-efficiency furnace, give our experts at Discount Mechanical Heating & Plumbing Services a call at 907-202-9798. You may also visit ENERGY STAR or contact your local utility organization if you have questions about other eligible home products.