granpaed1
New Member

We replaced the furnace and air conditioner and were told that we would recieve a $500.00 federal tax credit, im only seeing a $50.00 credit?

we installed a carrier split system central air conditioner that has a seer 16 rating and a natural gas furnace that has an afue rate of 95%, we were told we would recieve a $500.00 federal tax credit?

DianeW
Expert Alumni

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The amount of the credit is shown below from the IRS instructions.

Nonbusiness Energy Property Credit (Part II) You may be able to take a credit equal to the sum of: 

1. 10% of the amount paid or incurred for qualified energy efficiency improvements installed during 2016, and 

2. Any residential energy property costs paid or incurred in 2016. 

However, this credit is limited as follows

1. A total combined credit limit of $500 for all tax years after 2005. A combined credit limit of $200 for windows for all tax years after 2005. 

2. A credit limit for residential energy property costs for 2016 of $50 for any advanced main air circulating fan; $150 for any qualified natural gas, propane, or oil furnace or hot water boiler; and $300 for any item of energy efficient building property. 

Part I consists of solar, wind, and geothermal units installed in your home. For more information you can use this hyperlink:  IRS Instructions - Energy Credit