Qualifying Pellet Stoves

Qualifying Pellet Inserts

Qualifying Wood Stoves

The Inflation Reduction Act of 2022 changed the wood and pellet heater tax credit for calendar years 2023-2032. This federal tax credit covers 30 percent of purchase AND installation costs on qualifying new wood and pellet stoves and inserts. There is a $2,000 cap on the credit for any one year. This credit can be redeemed each year.

What Qualifies

  • Any wood heater that burns biomass as a fuel, heats air or water, and is at least 75 percent efficient per the higher heating value (HHV) of the fuel.
  • Purchased and fully installed in the year that the credit was taken.
  • Purchase and installation costs of the appliance and venting/chimney can count towards the credit.

Paperwork You Should Keep for Your Tax Records

  • Purchase receipt, including cost of product and installation.
  • The manufacturer certificate stating that the stove qualifies for the credit and is at least 75 percent efficient HHV.

How to Claim the Sec. 25(D) Federal Tax Credit

  • Claim the credit on your federal income tax form.
  • File Via Tax Software: Generally located in the “credits” section of the Federal portion under home ownership and residential energy credit.
  • File Via U.S. Mail: This credit would be claimed on IRS form 5695 under “Residential Energy Efficient Property Credit.”
  • Please consult your tax advisor for more information or any tax-related questions.