2020 Biomass Stove Tax Credit
What is the Biomass Stove Tax Credit? What products qualify?
This federal tax credit encourages people to make energy-conscious purchases that improve the energy efficiency of their home. It is a $300 dollar-for-dollar tax credit for purchasing a qualifying biomass-burning stove before December 31, 2020. Biomass simply means the stove uses wood or pellet fuel.
Any biomass appliance that meets or exceeds an energy efficiency rating of 75 percent qualifies for this credit. This credit does not cover open wood-burning fireplaces, hydronic heaters, wood warm air furnaces, and anything else that is not a wood or pellet stove. However, stop by our location at 26731 Main St., Conifer, CO 80433 and we can explain which products qualify for the tax credit.
How Do I Claim the Tax Credit?
Complete eligible purchase by December 31, 2020. Retain the receipts from your purchase as well as the manufacturer certificate stating the stove qualifies. Claim the credit on your federal income tax form. Biomass Stove Tax Credit Extended to December 31, 2020
NOTE: These instructions will be updated with new information as soon as it is available. Below are the instructions for 2017.
File Via Tax Software: Located in the “credits” section of the Federal portion under home ownership and residential energy credit.
File Via U.S. Mail: Usually located on line 22a of IRS form 5695 under residential energy property costs and energy-efficient building property. The IRS provides additional instructions for this form.
When does this tax credit go into effect and how long will it last?
This tax credit is valid only for the purchase of a qualifying biomass stove made before December 31, 2020. Installation of the qualifying product does not need to occur within the same tax year in which you made the purchase.
What paperwork should I retain for my personal tax records?
You should retain (1) the sales receipt and (2) the manufacturer’s certification statement. The sales receipt demonstrates that you purchased the qualifying stove during the effective time period of the credit. The retailer from whom you purchased the qualifying stove should also provide you with a manufacturer’s certification statement indicating that the product is qualified for the tax credit. This certification statement must contain the name and address of the manufacturer; the class of qualified energy property; the make, model number and any other appropriate identifiers of the stove; a statement that the product is eligible; and a declaration, signed by a person currently authorized to bind the manufacturer in these matters (e.g. Under penalties of perjury, I declare that I have examined this certification statement, and to the best of my knowledge and belief, the facts are true, correct, and complete.).
Are installation costs included in this tax credit?
Yes. Installation costs are included. To ensure that your stove burns as efficiently, cleanly, and safely as possible, be sure to have it installed by a professional.
Are biomass stoves installed in new or vacation homes covered by this tax credit?
No. The credit only applies to a purchase made for your existing principal residence.
If I’ve claimed other energy property tax credits for qualifying products in the past, such as solar collectors or window upgrades, am I still eligible for the biomass stove tax credit?
Yes. However, the tax credit is an aggregate, meaning the total non-business energy property credit can be used for items other than biomass stoves, such as windows and doors, HVAC and non-solar water heater upgrades, and roof upgrades, all of which are in the same tax credit category as biomass stoves. The tax credit for all of these upgrades is capped at $500 per consumer for all expenditures made after December 31, 2005.
If I claimed this tax credit in past years, may I claim it again this year?
No, if you claimed the tax credit in previous years and have exceeded the $500 lifetime cap of the credit, you may not claim it again.
Please advise your tax consultant for specifics to your individual tax situation.