New Tax Credit On Select Stoves & Inserts
26% Fireplace Insert & Stove Tax Credit
Yes, you saw that correctly, a 26% tax credit. The pandemic relief package signed in December 2020 included a tax credit for wood and wood pellet heaters. Units purchased to heat a large space or whole-home heating now qualify for a renewable energy tax credit.
Those purchasing a qualifying highly efficient wood-burning or wood pellet unit during the 2021 or 2022 tax years will be able to claim a credit for the entire purchase price. In other words, a 26% uncapped credit is applied to their taxes based on the total cost, including purchase & installation.
So What’s The Catch?
No catch. To qualify, the unit must be 75% efficient per the fuel’s higher heating value (HHV). Manufacturers will inform their dealers which of their units meet the credit standard. So all you have to do is inform the dealer you would like to purchase a qualifying unit.
How much is the credit really worth?
You take the qualifying unit’s purchase price, plus installation, and multiply by 26%, and that is the credit applied to your taxes. If you spent $6,000 between the unit and installation cost, your credit would be $1,560. In effect, you pay $4,440, now that’s a discount!
For more detailed information about the tax credit, visit the HPBA website.