Biomass Tax Credit for Wood and Pellet Stoves

By Marge Padgitt

Homeowners planning to install an alternative heating appliance should review the Biomass Tax Credit that provides an incentive for homeowners to install highly efficient wood and pellet stoves and fireplace inserts. This tax credit, which runs from January 1st, 2023, to December 31st, 2032, allows eligible taxpayers to receive a credit of 30% of the purchase and installation costs, up to $2,000 annually.

The Biomass Tax Credit, enacted as part of the Inflation Reduction Act, was implemented to promote the adoption of more sustainable and efficient heating options in residential properties. This tax credit is applicable to wood and pellet stoves that meet specific criteria. To qualify for the credit, the stoves must have a thermal efficiency of at least 75% per the higher heating value (HHV) of the fuel and be listed as an approved appliance. The tax credit is available for purchases and installations completed between January 1, 2023, and December 31, 2032.

In recent years, wood-burning appliance manufacturers have improved efficiency over their older models. Biomass fuel, which includes wood and wood-derived pellets, offers several advantages over traditional heating methods. One of the key benefits is its lower carbon footprint compared to fossil fuels. Biomass fuel is considered renewable as it is derived from organic materials, such as wood waste and agricultural crops. When burned in high-efficiency stoves, biomass fuel emits minimal greenhouse gases, contributing to reduced environmental impact. Additionally, biomass fuel is often sourced locally, supporting local economies and reducing dependence on foreign energy sources.

It is important to choose a stove that meets the thermal efficiency requirements to be eligible for the tax credit. Not all stoves meet these standards. There are stoves available at large box stores that do not meet the requirements, so choose a reputable hearth retailer or chimney service company to get a quality appliance. To identify qualifying products, individuals can refer to the Environmental Protection Agency's certified wood heater database, which lists stoves with efficiencies of at least 75%. Ask your hearth retailer or chimney sweep about the stoves they carry that qualify for the tax credit.

To claim the Biomass Tax Credit, homeowners must keep receipts for the purchase and installation, and the manufacturer's tax credit certificate. The manufacturer's certificate can typically be found on the manufacturer's website and should include information such as the manufacturer's name and address, the stove's make and model, proof of eligibility, and the manufacturer's signature. When filing taxes, individuals should complete Form 5695, available from the Internal Revenue Service (IRS), and include the necessary information, or give the information to your accountant. The credit offsets tax you owe, and it is not a refund.

Several manufacturers sell wood and pellet stoves that qualify for the Biomass Tax Credit. These include Regency, Quadra-Fire, Harman, Hearthstone, and Vermont Castings.

Like any heating system, biomass stoves require regular maintenance to ensure optimal performance and safety. Contact a professional chimney sweep for this service. Stoves should be swept annually for standard use, or bi-annually if used for continual heating purposes in order to remove flammable creosote. Only burn cordwood in the appliance and never burn treated wood, hedge, paper, or railroad ties. It is critical to follow the manufacturer's guidelines for cleaning, inspection, and maintenance.

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Marge Padgitt is the president of HearthMasters, Inc. in Independence, Missouri. She is the author of Wood-Fired Heating and Cooking and The Chimney and Hearth Pro's Resource Book. www.chimkc.com

Biomass Tax Credit - don't forget to claim it!

Happy Holidays from HearthMasters - and the Federal Government!

If you purchased a wood-burning stove or insert in 2017 - 2019 you may be eligible for a $300 tax credit.

Every year, many taxpayers fail to take advantage of the tax credits for which they're eligible. HPBA works to ensure that the $300 biomass stove tax credit is not forgotten. Rewarding investment in more energy-efficient technology can benefit not only individuals but also can positively impact the air quality of entire communities. The U.S. federal government offers a tax credit to tax-paying homeowners who purchase a wood or pellet stove that is at least 75 percent efficient.

The biomass stove tax credit has been extended for purchases made before December 31, 2020. You can claim this credit on your tax return if you made a qualifying purchase since December 31, 2017 and up to December 31, 2020.

What is it?

A $300 tax credit for purchasing a biomass stove that is at least 75 percent efficient. This includes wood-burning stoves and inserts, pellet stoves and inserts, and other types of stoves. 

How to Claim It:

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.

For more information visit:

https://www.hpba.org/Advocacy/Biomass-Stove-Tax-Credit

Be Prepared for Cold Winter

Farmer's Almanac predicts a very cold winter for 2013-2014 with large areas of below-normal temperatures over the Northern Plains and the Great Lakes.  Precipitation is expected to be higher than normal in the Midwest, Southeast and Southern Plains.

HearthMasters encourages people to be prepared for power outages by installing a wood stove or fireplace insert for heating. Gas furnaces do not work without a fan, which is run on electricity.

Hearthstone soapstone wood stove

Wood stoves or inserts may be used for everyday heating purposes as the primary source of heat or as a supplemental heat source to cut down on fuel costs.

Gene and I use a wood stove at our own house, and prefer using it to the gas furnace because there is low fan sound and it feels better than heated air coming through the registers.  Wood stoves produce convective heat, and radiant heat - like the sun - so the warmth penetrates the body, which helps people with conditions like arthritis and fibromyalgia.

During 2013 a $300 tax credit may be applied to a high-efficiency wood stove purchase.  Stoves should be sized correctly for the home, placed in the correct location for even heating, and installed by a professional stove installer, who should also install the chimney or flue liner.  This is not a DIY project, and most cities require that a permit be pulled by a qualified contractor for the installation. An improper installation can be a fire hazard.



Wood-burning stove insert

Wood stoves are freestanding appliances and inserts are installed in existing masonry chimneys.  They cannot be installed in a manufactured fireplace.


Wood stove or insert flues must be swept on a regular basis - once per year for supplemental heating, and twice per season if used for primary heating.  In some cases, sweeping more often may be necessary. 



This wood is not seasoned yet - there are no splits
or cracks in the ends

Use of the proper wood is critical to the performance of the stove.  Use only dry, seasoned hard or soft woods such as oak, hickory or maple.  Less wood is used when hardwoods are burned because they are more dense.  Purchase or cut wood at least six months in advance of the burning season and be sure to check the moisture content before burning, which should be between 15 - 20%.  Wet wood does not heat, the moisture must be burned off first which delays the heating time. 

Inexpensive moisture meters can be purchased from us or a hearth retailer, but a quick way to tell if wood is seasoned is to look for splits or cracks in the ends of the wood or bang two logs together - if there is a hollow sound it is pretty dry.  Keep wood off the ground and covered to keep rain off, but leave the sides open for air ventilation.

Never use dry pine logs or discarded Christmas trees in a wood stove or fireplace because they burn very hot very quickly, and chimney fires often occur when this is done.   If using hedge, use only one stick of hedge and two sticks of other wood at a time.  Hedge burns hot and fast as well and can cause overheating and warpage of a wood stove, which is costly damage and a potential safety hazard. 

Chimney fires are caused by the accumulation of creosote in the flue which ignites from heat or a spark.  Avoid chimney fires by having the chimney swept on a regular basis.

See more information and homeowner tips at www.chimkc.com.