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How to Claim your Biomass Tax Credit for your New Wood and Pellet Stove

The push for more efficient burning has its perks! The 2023 Biomass Tax Credit (which runs from January 1st, to December 31, 2023) returns a 30% tax credit annually to taxpayers who install a qualifying wood and pellet stove in their home. That’s up to $2,000 annually based on the entire cost of the unit and installation. 

What Wood and Pellet Stoves Qualify for the 2023 Tax Credit ?

An updated unit means lower emissions and higher efficiency. What this means for you is a long term investment that will help you burn safely while helping to lower your monthly heating bill.

Stoves that are eligible for this tax credit are those with a “thermal efficiency of at least 75% per the higher heating value of the fuel“(https://www.hpba.org/Advocacy/Biomass-Stove-Tax-Credit). 

Biomass fuel is eco-fuel, such as wood or the wood-processed pellets which burn cleaner and give off exceptional heat. Aside from the added bonus of a tax return on your new stove, you can also help lower your monthly heating bill in these colder months. 

How do I apply? 

Keep reading for a step by step process on how to apply for the 2023 tax credit for your new wood or pellet stove:

          1. When your new stove is installed, keep the following documentation:
              • Receipts of the wood or pellet stove that was purchased
              • Invoicing for the installation that was completed with any accompanying documentation
              • The manufacturer’s certificate for the wood or pellet stove. This can typically be found on the manufacturer’s website and must include:
                    •  the manufacturer’s name and address
                    • stove’s make and model
                    • proof of eligibility
                    • the class of qualified energy
                    • the manufacturer’s signature
          2.  When it’s time to file your taxes, you’ll need to fill our Form 5695, which is attached here: (https://www.irs.gov/pub/irs-pdf/f5695.pdf).
          3. Once the credit amount is determined on this 5695 Form, apply it to your 1040 Form.
          4. Have a tax expert double check, if necessary.

 

Keeping track of all the paperwork from purchasing to installation will ensure and protect your eligibility for this tax credit by providing the purchase year, the cost of the stove and the year it was installed in your home! Don’t let another year pass to enjoy your new stove and to take advantage of this 2023 tax break.

If you’re interested in learning more about what EPA stoves and units are eligible for this tax credit, visit the Environmental Protection Agency website here.

If you are ready to get your wood or pellet stove installation going, Midtown Chimney Services is here to help. Licensed, certified, and insured, give us a call today to learn more and get your next project on the books! 

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