It’s not too late to take advantage of the Biomass stove tax credit of up to $300 for purchases that meet certain environmental thresholds. As part of the American Taxpayer Relief Act of 2012, President Obama ensured this federal tax credit would remain in effect through at least December 2013. Not only that, but this act allows for a retroactive inclusion going back to 2011, provided the stoves or other biomass heating appliances meet a 75 percent biomass efficiency.
The purpose is to provide additional incentives for consumers to remain energy conscious when shopping for stoves and fireplace inserts. The credit is filed on the consumer’s federal tax returns and is deducted from the total amount owed at the end of the year.
In order to take advantage of these savings, consumers must ensure the manufacturer of the stove provides documentation that memorializes the 75% efficiency rating. Not only that, but these credits are applicable only to one’s primary home – no vacation homes or rental properties are eligible. In fact, the IRS has very specific compliance guidelines for the process.
The certification itself must include the make, model number and any other specifics associated with identifying the piece as well as the documentation that it meets the 75 percent efficiency rating. Save your receipt that proves you made the qualifying purchase within the approved time frame. The IRS encourages taxpayers to ensure the certification statement includes a declaration, signed by one who is authorized to speak on behalf of the company from where you made your purchase. It also wants the following statement: “Under penalties of perjury, I declare that I have examined this certification statement, and to the best of my knowledge and belief, the facts are true, correct, and complete.” You may never be asked to present it, but it’s crucial you keep it with your other important papers.
Many have wondered whether other woods and/or solid fuel appliances (fireplace inserts, for example) are eligible for the credit. The IRS currently has no guidance for consumers/taxpayers and did not issue any type of formal clarification.
An additional benefit is the installation costs that are included in the credit. To be eligible, your stove must have been professionally installed.
Be sure to ask questions if any of the compliance guidelines are confusing. While this might take a few hours of your time, the tax benefit usually equates to time well spent. Remember, though, until and unless this credit is extended again, it will expire December 31, 2013.