26% Tax Credit

2021-2022 Biomass Stove Tax Credit (25D)

What is the Biomass Stove Tax Credit?

The new Sec. 25(D) 26% tax credit is for qualified models and installation throughout 2021 and 2022. Currently, the CleanFire 300, 500, 700 and 900 models qualify for the credit. The Maxim 255 PE also qualifies.

What qualifies for the Biomass Stove Tax Credit?

  • Qualified furnaces must burn biomass as a fuel, heat air or water, and be at least 75 percent efficient per the higher heating value (HHV) of the fuel. The CleanFire 300, 500, 700, 900 and the Maxim 255 PE meet this requirement.
  • Must be installed between January 1, 2021 and December 31, 2022 to heat the taxpayers primary new or existing home.
  • Both purchase and installation costs (e.g. ThermoPEX, parts and accessories, onsite labor) can be included in your total cost.

Does it matter how I pay for my furnace?

It doesn’t matter if you pay for the furnace and installation up front or finance your purchase. Master Financing is available at participating dealers with multiple financing options available to fit your financial needs. Either way, you are eligible for the tax credit.

What is a Tax Credit?

A tax credit is a dollar-for-dollar reduction of the federal income tax you owe. So, in order to qualify for the federal tax credit, you need to owe taxes to benefit. The Biomass Stove Tax Credit is a non-refundable personal tax credit which means it can only reduce or eliminate your liability (how much money you owe to the IRS).

Fortunately, the Biomass Stove Tax Credit allows homeowners to apply their tax credit over multiple years. If your tax owed is reduced to zero by this credit, but you still have money left to claim, it can be carried over to the next tax year to further reduce your tax burden in the future.

What paperwork should I keep for tax records?

  • Keep your purchase receipt, including cost of products and installation.
  • Keep a copy of the 2021-2022 Manufacturer Certificate stating that the stove qualifies for the credit and is at least 75 percent efficient (HHV).

How do I claim the Sec. 25(D) credit?

Disclaimer

This summary information is provided as a convenience and may not be relied upon as a substitute for professional tax advice. WoodMaster, Inc. is not a tax advisor. Taxpayers claiming a tax credit should consult a tax professional with any questions. WoodMaster is not responsible or liable for the taxpayer’s ability to receive tax credits.

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