A New Tax Credit for Modern Wood & Pellet Heat
The Inflation Reduction Act 2022 changed the Wood and Pellet Heater Tax Credit for calendar years 2023-2032. This credit is for 30 percent of purchase AND installation costs beginning in 2023. This credit has a $2,000 cap on the credit for any one year and 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 is taken.
- Purchase and installation cost of appliance and venting/chimney can count towards the credit.
What Paperwork Should You Keep for 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.