Can I earn a tax credit for my new furnace?

April 08, 2020

For many households, there usually seems to be a large list of home improvement projects that they would like to get done or new ideas they’d like to give a shot. While several may not be necessities, furnace replacement is a job that may be key to keeping your home comfortable during the cooler months in Rapid City.

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 bills, but it could be a little overwhelming at first. The good news is that when you select a new energy-efficient furnace, you could be approved 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 get the tax credit, you have to buy a furnace that has earned the ENERGY STAR label. It cannot be a furnace that is labeled ENERGY STAR for “U.S. South Only.” When looking for furnace replacements, keep an eye out for solutions with the ENERGY STAR rating so you can be sure you’re choosing a high-efficiency furnace.

At Precision Mechanical, we’ll help you choose an option that fits your needs and helps you qualify for this tax credit. While ENERGY STAR products designate high efficiency, it’s important 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.

Taking advantage of this opportunity will not be the only savings you’ll receive when you buy a new high-efficiency furnace. Some of the most efficient models 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 help your home stay at just the right temperature.

If you think of questions regarding your eligibility for a tax credit, or if there are additional local savings you may be eligible for by buying a new high-efficiency furnace, give our technicians at Precision Mechanical a call at 605-206-2564. You could also visit ENERGY STAR or contact your local utility establishment if you have questions about other eligible home products.