Can I Earn a Tax Credit for My New Furnace?

For most homeowners, there typically seems to be a long list of home improvement projects that they need to complete or new ideas they’d like to give a shot. While a handful may not be required, furnace replacement is a job that might be critical to keeping your home comfortable throughout the colder months in Rapid City.

Getting a new furnace is a big investment. You’ll absolutely see the return-on-investment on your indoor comfort along with your utility costs, but it might be a bit daunting at first. The good news is that when you select a new energy-efficient furnace, you might be qualified 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 get the tax credit, you have to purchase 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 shopping for furnace replacements, look for heat pumps with the ENERGY STAR rating so you can be confident you’re choosing a high-efficiency furnace.

At Precision Mechanical, we’ll help you identify an option that matches your needs and ensures you qualify for this tax credit. While ENERGY STAR products signify high efficiency, it’s important to clarify that the furnace you pick has an Annual Fuel Utilization Efficiency (AFUE) greater than 95, in order to qualify for the tax credit. AFUE indicates 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 receive when you purchase a new high-efficiency furnace. Many of the most efficient products can save you hundreds of dollars on your energy costs throughout the year. And your household will also have higher confidence in your HVAC system to keep your house at just the right temp.

If you have questions about your eligibility for a tax credit, or if there are additional local savings you could be eligible for by purchasing a new high-efficiency furnace, give our teams at Precision Mechanical a call at 605-206-3766. You can also visit ENERGY STAR or contact your local utility establishment if you have questions about other eligible home products.