The work aims to systematically comb and refine the innovative application path and methodology of AIGC technology in Taohuawu woodblock New Year painting home furnishing design by means of literature synthesis and empirical analysis, so as to provide valuable references for the application of AIGC technology in home design. Focusing on Suzhou Taohuawu woodcut New Year paintings, through in-depth analysis of specific cases, the use of color and style characteristics of its performance were explored. First, the history, artistic features and styles of Taohuawu woodcut New Year paintings were systematically discussed and deeply analyzed, and then its characteristics in the modern context were further analyzed and summarized. Finally, combined with the characteristics of AIGC technology and the machine learning algorithm, the automatic generation and optimization of New Year paintings were processed. As a result, a new generation method of Taohuawu woodcut New Year paintings was successfully developed through the innovative reorganization and arrangement of the color application and design features of Taohuawu woodcut new year paintings by AIGC technology, providing a new way of thinking for the application of "intangible cultural heritage" culture in contemporary home furnishing design. In conclusion, the rapid development of AIGC technology brings far-reaching influence to the inheritance of "intangible cultural heritage" culture and its innovative application in home furnishing design. This study reveals the potential and challenge of AIGC technology in the inheritance of "intangible cultural heritage" culture, clarifies the development trend of the future home furnishing design field, and provides a clear path and an effective method for the innovative application of traditional "intangible cultural heritage" culture in the home furnishing design industry.