Camp Hill, Pa. - Depending on the size of a home, a new furnace can cost $4,000 to $5,000 or more. A federal tax credit can cover about a fourth of that cost.

To encourage use of the still pricey technology, there are federal tax credits for geothermal heating units that use ground temperature to heat and cool a home. But many homeowners don't know there are substantial tax credits to replace a conventional furnace too.

"To qualify for the federal tax credit on a gas hot air furnace, you have to have an efficiency rating of 95 percent or higher," said Joe Leinbach of Secco Home Services in Camp Hill. "On an oil hot air, or oil hot water system, you have to have an efficiency rating of 90 percent or higher."

That federal tax credit is up to $1,500. Since it's a tax credit, the money comes right off the amount of federal income tax you'd have to pay. If you take the new furnace plunge, Certified Public Accountant Tami Noll Russo, of Noll Financial Services in Middletown, said to document every step of the process for the IRS.

"Not all Energy Star appliances qualify for this tax credit," said Noll Russo. "The manufacturer has to give you a certification statement, a certificate that you file not in your tax but in the papers with your tax return. What actually gets filed is a form 5695."

To learn more about the energy tax credit for a new furnace, visit www.energystar.gov.

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