JulieS
Expert Alumni

Get your taxes done using TurboTax

There are actually two separate sections that cover furnaces and they have different rates and limitations.

 

The first is the general category of Natural gas, propane, oil furnace or oil hot water boiler. That section is limited to a 10% tax credit and no more than $150 per furnace.

 

You may need to check with the source that told you it was a 26% tax credit. There is a 26% credit for a Biomass furnace, but that is not the same as a natural gas furnace. 

 

This is also not a refundable credit, so it is limited to the amount of tax on your current return. Any excess carries forward to next year.

 

See the image below for where the 26% credit applies and the details of what is meant by Biomass furnace. 

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