Energy efficient furnace

Forum|Forum|4 years ago
January 26, 2022
2 replies
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Is there a tax credit for installing an energy efficient furnace?

Best answer by LenaH

Yes. If you made energy-efficient improvements to your home in 2021, such as like furnaces, boilers, biomass stoves, heat pumps, water heaters, central air conditioners, and circulating fans, the tax credit is 26 percent of the costs for assembly, preparation, and installation as well as piping and wiring.

Please follow the steps below to enter your furnace cost:

Open your return.
Search energy improvements with the magnifying glass tool.
Select the Jump to link.
Enter your furnace in the appropriate classification.
Click continue.
Answer the on-screen questions.
Your home energy credit summary should appear on the following screen.

LenaHAnswer

Please follow the steps below to enter your furnace cost:

Open your return.
Search energy improvements with the magnifying glass tool.
Select the Jump to link.
Enter your furnace in the appropriate classification.
Click continue.
Answer the on-screen questions.
Your home energy credit summary should appear on the following screen.

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Lenny8Author

What does the question - were any of these improvements related to the (construction) of your main home mean? What do they mean by construction? Like a new build?

KrisD15

Exactly,

the credit would not be claimed by a Builder.

(They might be able to claim a credit using Form 8908)

It would need to be a Homeowner improving their existing home.

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Drobc

Where do I enter a natural gas 96% energy efficient furnace specifically on the turbo tax questionnaire?

Vanessa A

The furnace goes under water boilers. If you click on the learn more link, you will see it includes all Natural Gas, Propane and Oil furnaces.

To enter these credits into TurboTax take the following steps:

Federal
Deductions and Credits
I'll Choose what I work on
Home Energy Credits which is under the "Your Home" category
Worth up to 30% of costs with a maximum credit $2,000 for

The Home Improvement Energy Efficient Credit is a non-refundable credit

You can combine the $2,000 credit with the $1,200 credit for a total of $3,200
This credit is a use it or lose it credit. If you do have enough tax liability in the year you buy and install the item, you will not be able to carry the credit forward.

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