Beginning in 2023, the biomass tax credit has been increased to a 30% tax credit and capped at $2,000 annually, based on the full cost (purchase and installation) of the new unit meeting a 75% (or higher) HHV rating as part of the Inflation Reduction Act of 2022.
What is Biomass Fuel?
These fuels are a sustainable heating option that converts wood byproducts into a usable energy. This creates heat when burned (thermal biomass), which is used to heat homes across the United States and other countries.
How do I claim the tax credit?
Be sure to keep any paperwork related to the purchase and installation of the stove, plus the manufacturer’s federal tax credit certificate. The tax credit is applied by the year the stove was installed into your home. If you have any further questions about claiming it when you file taxes, please reach out to a tax professional.
As part of a pandemic relief package that was signed into law at the very end of December 2020, included a tax credit for wood and pellet heaters. Wood and Pellet stoves now qualify for a renewable energy investment credit. You can see the units we offer by visiting our products page.
Consumers who purchase highly efficient wood or pellet stoves will be able to claim a 26% tax credit that is uncapped and based on the full cost (purchase and installation) of the unit. This credit is 26% through 2021 and 2022. It will be 22% in 2023.
For more information, visit HPBA’s website regarding this tax credit.
See the EPA’s website for a list of qualifying wood and pellet heaters (It must be listed at least 75% efficient per the higher heating value of the fuel.)