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I would put a 4 foot around with just washable floor just Incase of a leak so you could clean it up or you will get mold
Hi! I would check on your local and state fire codes. There may be a very specific distance required.
The IRC governs mostly access to the furnace and does not specify clearances other than to say they should be in accordance with the manufactures requirements for clearance from combustible materials, which can be as little as an inch depending on the fuel and type of unit. You need to check the installation guide for your unit. You may very well be able to carpet very close to your furnace The question is do you want to? Most furnaces are hidden in a closet or mechanical room and not in carpeted living space. Like Kathy suggested, you probably want an easy to clean flooring material directly around the furnace that is not combustible.
Carpets in the basement can get moldy or damp in my experience. I just bought a few rolls of vinyl at Home Depot and use that in my basement. There are many different patterns and colors that look great!