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How to Receive a Tax Credit for Natural Gas Furnaces

Look at the energy efficient tax credit savings available before purchasing a natural gas furnace. If you are deciding between an energy efficient model and a standard model based on cost, choosing the correct energy efficient model will save you much more money. The American Recovery and Reinvestment Act of 2009 offers energy efficient tax credits for 30 percent of the total cost of new energy efficient products up to a maximum level of $1,500. For example, units costing $2,000 will be eligible for a $600 tax credit (30 percent of $2,000). Any unit exceeding $5,000 will be subject to the maximum eligible level tax credit of $1,500. If a $6,000 unit is purchased, it will still be subject to the $1,500 limit, even though 30 percent of $6,000 is $1,800.

Choose a natural gas furnace that meets the energy efficient requirements outlined by the U.S. Government. Products with the Energy Star seal are NOT all eligible for this tax savings. To qualify, the natural gas furnace must have annual fuel usage efficiency (AFUE) above 95 percent. This is the level necessary to meet the government high energy efficiency requirements for the tax credit. The higher the AFUE, the more efficient the natural gas furnace will be. The Gas Appliance Manufacturers Association (GAMA) provides information on hundreds of natural gas furnace model and their corresponding AFUE.

Purchase and install your new energy efficient central natural gas furnace. Save all receipts and records on the purchase of the new natural gas furnace.

Look for the Manufacturer's Certification Statement. The IRS recommends saving the Manufacturers Certification Statement as well. The government is encouraging manufacturers to supply this certificate with all products that meet requirements for the tax credit. This certification should be included with your purchase. The Internal Revenue Service will not require the certificate to be filed with taxes. The certificate ensures you have purchased the correct product to qualify for the tax credit savings.

File for a tax rebate using IRS Tax Form 5695. This form will not be available until the end of the 2009 tax year. The energy efficient tax rebate should be claimed when filing taxes. This is a particularly valuable tax savings. Tax credits are a substantially better benefit than tax deductions. A tax credit of $1,500 will actually lower your taxes by $1,500. Expenses eligible for a tax deduction of $1,500 will only result in a small portion of the $1,500 to be returned to the consumer. For example if you are in the 28 percent tax bracket, you will only receive a credit for 28 percent of $1,500.

U.S. Gov. Energy Star Website
Gas Appliance Manufacturers Association (GAMA)