Minnesota Furnace Rebates and Tax Credits for 2026: What's Available

Why Rebates and Credits Matter for Minnesota Furnace Buyers

A new 96% AFUE Goodman furnace installed in Minnesota typically costs $3,500-$5,500 all-in. Available incentives can reduce that by $500-$2,000 or more—real money that changes the math on upgrading. The challenge is that programs change frequently and many homeowners don't know what they're eligible for.

Federal Tax Credit: 25C Energy Efficiency Home Improvement Credit

The Inflation Reduction Act's Section 25C tax credit provides a 30% credit (up to $600) on qualifying high-efficiency heating equipment. For gas furnaces: must meet efficiency thresholds (typically 97%+ AFUE for the full credit—not all 96% units qualify, check specific model certification). The credit is per year, not per lifetime, so you can claim it in multiple years for different improvements. It directly reduces your federal tax liability dollar-for-dollar. You must own the home and it must be your primary residence. File IRS Form 5695. Keep your receipt and the manufacturer's certification statement. Verify current requirements at energystar.gov before purchasing—thresholds are subject to change.

Xcel Energy Rebates

Xcel Energy serves much of the Twin Cities metro and offers rebates on high-efficiency gas furnaces: typically $100-$250 for qualifying 96%+ AFUE units. Smart thermostat rebates ($50-$100) are often stackable. Income-qualified programs may offer higher amounts. Check current amounts at xcelenergy.com/rebates—programs change seasonally.

CenterPoint Energy Rebates

CenterPoint Energy (natural gas for much of Minnesota) offers rebates on high-efficiency furnaces, typically $75-$200 depending on equipment and program year, plus smart thermostat rebates. Energy audits may identify additional upgrade rebates. Check centerpointenergy.com/rebates for current programs.

Other Minnesota Utilities

If served by Minnesota Power, Great Plains Energy, a municipal utility, or rural electric cooperative, check their websites directly. Many participate in efficiency programs through the Minnesota Department of Commerce's Conservation Improvement Program (CIP), which requires utilities to offer efficiency rebates.

Minnesota State Programs

The Minnesota Department of Commerce administers income-qualified programs: the Energy Assistance Program (EAP) helps pay heating bills and may cover furnace replacement in some cases. The Weatherization Assistance Program (WAP) can include furnace replacement as part of whole-home efficiency packages. Contact your county human services office or call 211 for eligibility information.

Stacking Incentives: Getting Maximum Value

The best outcome stacks multiple programs. Example scenario: Federal 25C tax credit (up to $600) + Xcel or CenterPoint rebate ($100-$250) + smart thermostat rebate ($50-$100) = up to $950 off a $4,500 installed job. For income-qualified households, state weatherization programs can cover substantially more.

Documentation You'll Need

Keep: purchase receipt with model number and date, manufacturer's certification statement, installation receipt from licensed contractor, utility rebate submission form (submit within 90-180 days), and IRS Form 5695 for federal credit. Most homeowners leave money on the table simply by not knowing these programs exist or missing documentation deadlines.

At Furnace Direct, we can help identify which Goodman models carry certifications for available rebate programs. Browse our current inventory or contact us for qualifying model guidance. Related: Furnace installation cost in Minnesota 2026 | How to get multiple HVAC quotes | Goodman GMVC96 review