**UPDATED 2023**
In August 2022, the United States passed the Inflation Reduction Act (IRA), which allows high-efficiency biomass heating products to qualify for a 30% tax credit capped at $2,000 annually (section 25(C) of the Internal Revenue Code). This tax credit can be used on the purchase and installation costs of qualified heating products installed between January 1, 2023 and December 31, 2032. Qualifying appliances must have a thermal efficiency of at least 75% per the higher heating value (HHV) of the fuel. If a heating product meets the efficiency requirements and was purchased in 2022, but not installed until 2023, it can be claimed on a 2023 tax return. All products must be claimed on the tax return year in which the installation is complete.
Note: A tax credit was available for home heating equipment purchased between January 1, 2021 and December 31, 2022. That tax credit, called the “Investment Tax Credit” (section 25(D) of the Internal Revenue Code), allowed for uncapped credit of up to 26% on qualifying heaters. The Investment Tax Credit is now expired, and cannot be used for purchases or installations made after December 31, 2022.
The Hearth, Patio, & Barbecue Association (HPBA) has an in-depth summary of how to use the credit, apply for it, and much more information available here.
Obadiah’s Woodstoves and Alternative Energy also offers a wide selection of EPA-approved heaters of all types, and we are happy to answer any questions you may have regarding tax credits for wood heat.
