High-efficiency furnaces and boilers installed by December 31, 2025 qualify for a federal tax credit of up to $600. The equipment must run on natural gas, propane, or oil and meet strict AFUE thresholds.
Credit Expired December 31, 2025
The 25C Energy Efficient Home Improvement Credit expired on December 31, 2025 due to the "One Big Beautiful Bill" (Public Law 119-21). If you installed a qualifying furnace or boiler by that date, you can still claim the credit on your 2025 tax return. (IRS FAQ on Public Law 119-21)
Quick Summary
- Credit: 30% of costs, maximum $600
- Furnaces must have AFUE 97% or higher
- Requires manufacturer's QMID code
- Covers equipment and installation labor
- Part of the $1,200 annual cap for Section B improvements
- Can combine with electrical panel credit for up to $600 more
What Qualifies
Line 24 on Form 5695 covers natural gas, propane, or oil furnaces and hot water boilers. Electric resistance furnaces do not qualify (consider heat pumps instead, which qualified for up to $2,000 on Line 29).
Efficiency Requirements
Furnaces: AFUE (Annual Fuel Utilization Efficiency) of 97% or higher
Hot Water Boilers: AFUE of 95% or higher
These ratings appear on the equipment's EnergyGuide label and in the manufacturer's specifications.
Standard furnaces typically have AFUE ratings of 80% to 90%. Only the most efficient condensing furnaces reach the 97% threshold required for this credit.
Credit Amount
The credit is 30% of your total costs, capped at $600. This includes both equipment and installation labor.
Examples:
- Total cost: $3,500 → Credit: $1,050 → You receive: $600 (capped)
- Total cost: $1,800 → Credit: $540 → You receive: $540
Tax Credit Calculator
This calculator provides an estimate. Your actual credit may vary based on your tax situation. The credit is non-refundable and cannot exceed your tax liability.
Note
If you received a utility rebate or manufacturer rebate, subtract it from your costs before calculating the credit.
How to Complete Line 24
Line 24 is in Part II, Section B of Form 5695. You'll fill in four sub-lines.
Line 24a: QMID and Most Expensive Unit
Enter two pieces of information:
- QMID boxes: Your manufacturer's 4-character QMID code
- Cost field: The cost of your most expensive furnace or boiler (if you installed more than one)
The QMID is a 4-character alphanumeric code that identifies your equipment manufacturer. Enter it exactly as shown in the IRS database or our directory.
Find your QMID using our searchable directory. Search by brand name (the name printed on your equipment), and we'll provide the correct manufacturer code.
Enter exactly 4 characters, one per box. No spaces or dashes.
Line 24b: Other Furnaces or Boilers
If you installed additional qualifying furnaces or boilers, enter their combined cost here. Most homeowners will enter -0-.
Line 24c: Total Costs
Add Line 24a cost plus Line 24b. This is your total furnace and boiler costs.
Line 24d: Calculate Credit
Multiply Line 24c by 30% (0.30). Enter the result, but if it exceeds $600, enter $600.
Example:
- Line 24a: QMID "L7S0", cost $4,200
- Line 24b: $0
- Line 24c: $4,200
- Line 24d: $4,200 × 0.30 = $1,260 → Enter $600 (capped)
Stacking With Other Credits
The furnace credit is part of the $1,200 annual limit that covers Lines 18-28 in Section B (insulation, doors, windows, AC, water heaters, furnaces, electrical panels, and audits).
However, you can also claim electrical panel upgrades on Line 25 for up to $600 more.
Combining Furnace Credit With Other Improvements
| Equipment | Credit Limit | Notes |
|---|---|---|
| Furnace only | $600 | Line 24 max |
| Furnace + Panel upgrade | $1,200 | $600 each on Lines 24 & 25 |
| Furnace + Windows | $1,200 | Subject to $1,200 annual cap |
Combined annual limit for Lines 18-28 (excluding Line 29 heat pumps): $1,200
Line 25: Electrical Panel Upgrades
Don't Miss the Electrical Credit
If your contractor upgraded your electrical panel, added circuits, or installed new feeders specifically to support your furnace or boiler, you can claim an additional credit of up to $600 on Line 25.
This is separate from your furnace credit. Here's how to claim it:
Line 25a: Answer "Yes" if you installed electrical improvements
Line 25b: Enter code "G" (enables furnace or boiler)
Line 25c: Enter the cost of electrical work
Line 25d: Enter your furnace/boiler QMID
Line 25e: Multiply Line 25c by 30%, max $600
Example: You paid $1,800 for a panel upgrade to support your new furnace.
- $1,800 × 0.30 = $540
- Enter $540 on Line 25e
This $540 is in addition to your $600 furnace credit, giving you a total of $1,140.
What's Covered
Yes, included in the credit
- Furnace or boiler equipment cost
- Installation labor
- Thermostat upgrades (when installed with qualifying system)
- Electrical panel upgrades (Line 25, separate $600 credit)
No, not covered
- Ductwork modifications
- Chimney work or venting (unless required for the qualifying equipment)
- Extended warranties
- Maintenance agreements
Required Documentation
Keep these documents for at least 3 years after filing:
Gather Before Filing
- Contractor invoice showing installation date and itemized costs
- Equipment specifications showing AFUE rating
- Manufacturer's QMID code
- Payment confirmation
- Electrical invoice (if panel/circuit work was done)
Complete Form 5695
- Line 24a: Enter QMID and cost of most expensive furnace/boiler
- Line 24b: Cost of other furnaces/boilers (or -0-)
- Line 24c: Total costs
- Line 24d: Multiply by 30%, max $600
- If electrical work: Complete Line 25 (code G, costs, QMID)
Transfer to Form 1040
- Line 24d goes into Line 27 calculation
- Final credit from Line 32 goes to Schedule 3, line 5b
Annual Limits Explained
The furnace credit shares the $1,200 annual cap with other Section B improvements. This means the total you can claim for Lines 18-28 combined (insulation, doors, windows, AC, water heaters, furnaces, electrical panels, audits) is $1,200.
Heat pumps on Line 29 have a separate $2,000 limit and do not count toward the $1,200 cap.
Maximum possible 25C credit in one year (during 2023-2025):
- Heat pumps (Line 29): $2,000
- Other improvements (Lines 18-28): $1,200
- Total: $3,200
Common Questions
Finding Your QMID
Starting with the 2025 tax year, you need your manufacturer's QMID — a 4-character IRS registration code. It won't be on your furnace or your contractor's invoice. Look it up in our QMID directory by brand name, or call the manufacturer and ask.
Common furnace brands and their parent manufacturers:
- Carrier brands (Bryant, Payne, Comfortmaker) → QMID:
N8H2 - Trane brands (American Standard, Ameristar) → QMID:
B8T9 - Lennox → QMID:
L7S0 - Rheem brands (Ruud, Weatherking) → QMID:
K3A8 - Daikin brands (Goodman, Amana) → QMID:
I7Q6
Check the directory for your specific brand to get the exact code.
Timeline
Installation Deadline Passed
The credit expired December 31, 2025. Only installations placed in service by that date qualify.
The installation date matters, not the purchase date. If your contractor finished the job on December 30, 2025, you can claim it on your 2025 tax return (filed in 2026). If installation was completed January 1, 2026 or later, the credit does not apply.
Official Resources
IRS overview of the Energy Efficient Home Improvement Credit
IRS.govDownload the current year Form 5695
IRS.govDetailed instructions for completing Form 5695
IRS.govRelated Articles
- Form 5695 Complete Guide - Line-by-line instructions for all credits
- 25C Tax Credit for Heat Pumps - Compare furnace credit with heat pump credit
- What is a QMID? - Understanding manufacturer identification codes
Need Help?
Search our QMID directory to find your manufacturer's code, or read our complete Form 5695 guide for step-by-step instructions on claiming all energy credits.