The residential energy property credit is available for individuals who install a qualifying, energy-efficient furnace in a nonbusiness dwelling. The credit is worth up to 30 percent of the total cost of the improvements made, with a maximum credit of $1,500 allowed, states the IRS.
This credit is good on both primary and secondary residences, but it does not apply to rental properties or places of business, according to the IRS.
To apply for this credit, individuals must fill out IRS Form 5695 and submit it along with a copy of the receipt for the furnace when taxed are filed, explains Energy Star. Individuals should obtain a copy of the manufacturer's certification statement, which certifies the furnace qualifies as energy-efficient. The certification statement can be found on the manufacturer's website.