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.