$300 Biomass-Burning Stove Federal Tax Credit
On December 16, 2015, the long-awaited year-end tax deal that was negotiated between the House and Senate leadership was unveiled. The bill reauthorizes the tax credit retroactively to January 1, 2015 and extended through December 31, 2016. This federal tax credit encourages people to make energy-conscious purchases that improve the energy efficiency of their home. It is a 10% credit up to $300 for buying a qualifying biomass-burning stove between January 1, 2015 and December 31, 2016. Biomass simply means the stove uses wood or pellet fuel.
Consumers claim the credit on their federal income tax form at the end of the year. This credit reduces the amount of tax you owe. The credit is a reduction of total income tax at the bottom of your return, up to $300. This tax credit is a non-refundable tax credit available for individuals who pay taxes and who make energy-conscious purchases to improve the energy efficiency of their home.
Note: With regard to tax credits vs. tax deductions, in general, a tax credit is more valuable than a similar tax deduction. A tax credit reduces the tax you pay, dollar-for-dollar. Tax deductions - such as those for home mortgages and charitable giving - lower your taxable income.