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

[Texas Roger · Accepted solution]

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-qualif...

[Rainman12]

$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. 

[doc16joshua]

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.  

[PattiF]

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.