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Tax Credit FAQ

What is the Biomass-Burning Stove Tax Credit?
This federal tax credit encourages people to make energy-conscious purchases that improve the energy efficiency of their home. It is an up to $300 credit you can get for buying a qualifying biomass-burning stove, fireplace, or fireplace insert between January 1, 2012 and December 31, 2013. Biomass simply means the stove uses wood or pellet fuel.
Question: What is the difference between a tax deduction and a tax credit?
A deduction is an expense or amount you can subtract from your taxable income. A tax credit lowers your actual tax bill dollar-for-dollar, in this case by up to $300. In general, a tax credit is more valuable than a similar tax deduction.
How is the value of this tax credit determined?
When you buy a qualifying biomass-burning appliance between January 1, 2012 and December 31, 2013, you get a tax credit of 10% of the total price, up to $300 dollars. So, for example, if your wood or pellet stove cost $3,000 (which can include installation), you can deduct $300 from the taxes you owe the government.
What appliances qualify for the tax credit?
Any wood- or pellet-burning unit that meets the 75% efficiency rating qualifies for this credit. Manufacturers test their products to certify they meet this efficiency standard, and the IRS-required certification will come with the product straight from the appliance manufacturer. Visit our showroom so we can explain which products we have that will qualify for the tax credit.
Are installation costs included in this tax credit?
Yes. Installation costs are included as long as professional installation is required for the proper and safe operation of the stove. The cost of materials such as venting is also included.
How do I ensure that I can collect on my tax credit?

Save your receipt that proves you purchased the qualifying appliance between January 1, 2012 and December 31, 2013. You'll also need a manufacturer's certification statement that states your product meets the 75% efficiency rating needed to qualify for this tax credit. There is a maximum $500 lifetime benefit that is combined with high effiency central heating, windows, and insulation products.

Wood Heat will give you the manufacturer's certification statement that will include:

  • The name and address of the manufacturer.
  • Identification of the class of qualified energy property (e.g., biomass-burning stove).
  • The make, model number and any other appropriate identifiers of the stove.
  • A statement that the product is an eligible qualified energy property.
  • A signature of a person able to bind the manufacturer to the above standards.

These documents don't need to be attached to your tax return, but you should keep them for your records.

How can I find out more about this tax credit?
Stop by our showroom. Our trained professionals will be happy to assist you.

Source: HPBA