Did you purchase a new wood stove during 2015? Are you planning on buying one now that 2016 has arrived? If so, you may qualify for a $300 tax credit!
Qualifying purchases of new wood and pellet stoves are now eligible for a $300 tax credit. The tax credit has been extended through December 31st, 2016 and includes all purchases made during 2015 and 2016.
What is the biomass tax credit?
For several years, the US government has offered the biomass tax credit to encourage homeowners to make responsible decisions when purchasing new heating appliances. In this case, homeowners who buy a qualifying high efficiency biomass – meaning burns wood or pellets – stove can qualify for a $300 credit on their federal income taxes.
In order to qualify for the tax credit, new stove purchases must meet certain criteria.
- A new biomass (wood or pellet) stove purchased during 2015 or 2016. If the stove was purchased in 2014 but not installed until 2015, it will still qualify for the tax credit.
- Must have an EPA certification of operating with at least 75% efficiency.
- Previous sales outside the qualifying dates or stoves that have already been used for an exemption do not qualify a second time.
How do I claim it on my tax return?
The biomass tax credit can be claimed by filling out IRS Form 5695. The qualifying credit on the form, which covers residential energy credits, is typically found on line 22A. However, it is extremely important to check to make sure the right credit is applied before filing.
If you fill out your tax forms online or with tax filing software, look for the biomass tax credit under the “Credits” section of the national form; it may be listed under the subcategory for “Home ownership”.
No matter how you file, if you claimed a new stove in year’s past, the credit cannot be applied again.
Benefits of biomass stoves
The tax credit isn’t the only reason to choose a biomass stove!
- Green energy. Because biomass stoves use a renewable resource for fuel, they are often considered a green source of energy. Likewise, burning pellets – which are often made of compressed wood scraps and remnants – is a way to be ever more environmentally friendly.
- Efficient. Energy Star and EPA certified biomass stoves are required to operate with at least 75% efficiency. This is much higher than open hearth wood fireplaces.
- Low cost. In addition to being a renewable resource, biomass stoves are have extremely low operating costs. Pellet stoves, for example, have heating costs that are lower than oil, electricity, propane, and kerosene. Wood is even less expensive than pellets; with a little bit of elbow grease and a day spent chopping wood, many homeowners are able to get firewood for the year at little to no out of pocket expense.
If you’re looking for a way to more efficiently heat your home – while also saving money on your taxes – let The Cozy Flame help you find your next biomass stove. Stop by our showroom today and let our expert staff show you some of our high efficiency, tax credit qualifying biomass stoves!