Federal Tax Credit for Energy Efficiency on Heating, Furnaces, and Boilers

There is a Federal Energy Efficiency Tax Credit on Qualifying Heaters, Furnaces, and Boilers.

For 2011, the Federal Tax Credit for energy efficiency drops to 10%, up to a $500 maximum. (2010 Federal Tax Credit information)

• Oil and gas furnace and boiler incentives are $150
• Additional $50 for efficient furnace fans
• Oil furnaces, boilers, and gas boilers must be 95% efficient. (It was 90% in 2010)
• $300 cap for air conditioners
• Existing home and principal residence.   New construction and rentals do not qualify.
• Expires December 31, 2011 – Consult the What other rebates are available? below for other possible rebates.

The 2011 tax credit reverted to  2005-2008 levels. Anyone who previously took advantage of the program can’t apply for incentives that exceed $500.  IE If you claimed $500 between 2005 – 2008 on a previous energy efficiency project, or at least $500 tax credit from 2009 – 2010, you are ineligible for the 2011 energy efficiency tax credit.

If you used say $200 of the $500 energy efficiency tax credit from 2005 – 2008, and did not utilize the 2009 – 2010 energy efficiency tax credit, you would still have a $300 credit available.

Federal Energy efficiency Tax Credit on Qualifying biomass fuel stoves or Wood Heat Stoves, Pellet Stoves, Fireplace Inserts.  There is also a Federal Tax Credit for Energy Efficiency on Water Heaters, Wood Heat Stoves, Pellet Stoves, Furnaces and Boilers, Geo-Thermal Heat Pumps, Windows, Doors, and Skylights.

If you have been thinking about replacing these items, you might as well upgrade now and save some money. Furnaces 15 years old or older can be replaced with much more efficient units. New models with electric ignition are the most efficient models.

Natural Gas or Propane Furnaces must have Annual Fuel Utilization Efficiency or
AFUE >= 95% to qualify for the tax credit. Oil Furnaces and as, Propane, or Oil Hot Water Boiler must have AFUE >= 95%. Not all ENERGY STAR products will qualify for the tax credit.

Gas fired furnace list. Here is a list of qualifying oil furnaces and oil boilers that may qualify. Also consider installing radiant floor heating instead of using a furnace.

Energy Star has a store location finder to help you find local dealers.

This credit reduces the amount of tax you owe. The credit is a reduction of total income tax at the bottom of your return. This tax credit is a non-refundable tax credit. Consult your tax adviser for details. Use it or lose it! It

Double dip! Local utilities like PG&E have their own rebates for Energy Efficient Appliances. To find out if rebates or other incentives are available in your area, visit the ENERGY STAR Rebate Finder.

Related posts:

1. Federal Tax Credit for Energy Efficiency – Water Heaters
2. Federal Tax Credit for Energy Efficiency on Windows, Doors, Skylights
3. Federal Tax Credits for Energy Efficiency – Wood Stoves, Pellet Stoves, Fireplace Inserts
4. Federal Tax Credit for Energy Efficiency on GeoThermal Heat Pump
5. Federal Tax Credit for Energy Efficiency – Insulation
6. Federal Tax Credits for Energy Efficiency – Air Conditioning, HVAC
7. Federal Tax Credit for Consumer Energy Efficiency – Fuel Cells Power Generators and Microturbine System
8. Federal Energy Tax Credit 2010 – AMT Exclusion Lifted

Posted on January 31st, 2011
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