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New Member
posted Feb 10, 2022 12:46:11 PM

Why am I only getting a $150 tax credit for a new furnace/central air when I should be getting $500?

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1 Best answer
Level 15
Feb 10, 2022 12:55:40 PM

The tax credit for a new furnace is 10 percent of the cost on new qualified energy property installed, including the cost of labor and installation up to a maximum of $150.  You may be eligible for an additional credit of up to $50 for an advanced air circulating fan for the furnace.  That must be entered in the box above the box for the furnace. 

 

See this TurboTax article for more details: https://turbotax.intuit.com/tax-tips/home-ownership/energy-tax-credit-which-home-improvements-qualify/L5rZH56ex

4 Replies
Level 15
Feb 10, 2022 12:55:40 PM

The tax credit for a new furnace is 10 percent of the cost on new qualified energy property installed, including the cost of labor and installation up to a maximum of $150.  You may be eligible for an additional credit of up to $50 for an advanced air circulating fan for the furnace.  That must be entered in the box above the box for the furnace. 

 

See this TurboTax article for more details: https://turbotax.intuit.com/tax-tips/home-ownership/energy-tax-credit-which-home-improvements-qualify/L5rZH56ex

Alumni
Feb 10, 2022 12:58:29 PM

$150 is the limit for a new furnace. See page 2 of IRS Form 5695. https://www.irs.gov/pub/irs-pdf/f5695.pdf 

$500 is the lifetime limit for all eligible categories; each category has its own limit. 

 

New Member
Mar 20, 2022 11:50:40 AM

I also don't understand this.  I spent $9350 on energy efficient Air conditioner and Furnace and it states on the form that you get 10% of your purchase back up to $500.  The person that sold it to me also said I would get $500 back.  Where is the $150 number coming from, that's different from what the form says.  

Expert Alumni
Mar 20, 2022 12:07:50 PM

Here is the information from IRS Instructions for Form 5695:

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

The IRS limit is $150 for a furnace. The person that sold it to you may not have read the fine print about the credit.