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How To Claim A New Home Furnace On Your Income Tax Form

How To Claim A New Home Furnace On Your Income Tax Form

The federal government is offering tax incentives to homeowners and businesses who purchase brand new sustainable energy-efficient appliances. Homeowners who purchase a qualifying home furnace can deduct up to $150 from their taxes. Here is how to claim a new home furnace on your federal income tax form.

“Fill Out Residential Energy Credits Form 5695”

The “Energy Policy Act of 2005” has provided for tax incentives to encourage individuals and businesses to purchase more energy-efficient fixtures, appliances, and equipment.
A new home hot water boiler must achieve at least a 95 annual fuel utilization efficiency (AFUE) rating. This means that 95% of all the heating energy goes into the home duct system with only 5% being wasted.

Homeowners can claim up to a $150 tax credit on their high-efficiency home furnaces by filling out their Internal Revenue Service (IRS) 1040 United States Federal Individual Income Tax Form or 1040NR for Non-Resident Aliens. These are the forms to use for:

  • Itemized deductions
  • Tax credits

To determine the exact amount of your tax credit, fill out the “Residential Energy Credits Form 5695.” As you fill out this form, you will note that there are two sections: Part I is for “Residential Energy Efficient Property Credit” and Part II is for “Nonbusiness Energy Property Credit.” Part II is where you will claim this home furnace tax credit.

Claim A New Home Furnace On Your Income Tax Form

Move down the page until you see Line 22 for “Residential Energy Property Costs.” The instructions state that the unit “must be placed in service by you; include labor costs for onsite preparation, assembly and, and the original installation.” There are tax credits for an efficient building (22a), water boiler (22b), or air circulating fan in a furnace (22c). Use Line 22b for a “Qualified natural gas, propane, or hot water boiler.” The maximum amount you can claim is $150.00 for your new home furnace.

Continue to fill out Form 5695 until you get your total for the “Nonbusiness Energy Property Credit” on Line 30. Then take the total from Line 30 and enter it on Form 1040, Line 52, or Form 1040NR, Line 49. Finally, attach Form 5695 to your Form 1040 or Form 1040NR.


This article contains general legal information but does not constitute professional legal advice for your particular situation. The Law Dictionary is not a law firm, and this page does not create an attorney-client or legal adviser relationship. If you have specific questions, please consult a qualified attorney licensed in your jurisdiction.

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