$300 Federal Biomass Tax Credit Approved for 2015-2016:
Good News for Wood Stove Buyers!
Click here to link to Frequently Asked Questions
Link to Woodstock Soapstone Wood Stove Federal Tax Credit Certificate
There is good news for those who purchased one of our high-efficiency wood stoves in 2015 as well as those considering the purchase of one of our high-efficienty wood stoves in 2016. On December 16, 2015 the Federal government reauthorized the biomass tax credit retroactively to January 1, 2015 and extended through December 31, 2016, for the purchase and installation of high efficiency biomass stoves. As with the past tax credit all of our wood stoves qualify, giving you the opportunity to enjoy the warmth and beauty of our soapstone stoves as well as extra savings through the Federal tax credit.
The amount of the tax credit is $300, with a "lifetime limit" of $500. There are some additional stipulations that laid out below.
Below are a few examples:
1. If a homeowner received a $150 tax credit for insulation in 2006, and a $75 credit for replacing a door in 2007 they have used $225 of the maximum $500 credit. If they purchased and installed a qualifying biomass stove this year, 2015, they could receive this year’s credit up to $275.
$500 - $150 = $350, $350 - $75 = $275 (Tax credit would be 10% of purchase price and installation costs up to $275).
2. If a homeowner purchased and installed a Woodstock Soapstone Fireview Woodstove in 2010 and received a tax credit of $695, they could not claim the tax credit on the purchase of another biomass stove in 2011 because they have exceeded the $500 maximum.
3. If a homeowner has purchased a qualifying biomass stove in the past and claimed the $300 credit, they could not apply the remainder of the $500 maximum credit to the purchase of a biomass stove in 2011, because the cap is $300 total for biomass stoves.
The method for testing efficiency has been specified once again as the Low Heat Value of wood (LHV)*. Efficiency was calculated using the Lower Heat Value (LHV)* for the tax credit. Using this method all of the Woodstock Soapstone Woodstoves exceed the minimum 75% efficiency requirement.
Woodstock Soapstone Model HHV* LHV*
These results have been independently confirmed by Omni Test Laboratories Inc. 13327 NE Airport Way, Portland, OR. 97230 and by Intertek
*The Higher Heat Value method does not subtract the energy lost to vaporizing water from the wood during combustion. Because this lost energy is subtracted from the calculation in the Lower Heat Value method the net efficiency rating is higher.
Woodstock Soapstone Co. strives to provide the most complete and accurate information possible. Due to the scope and complexity of this tax credit a qualified tax professional should be consulted to confirm that you qualify.
More information regarding the tax credit and qualifying products can be found at The EPA web site www.epa.gov/burnwise and www.energystar.gov
Q: Are all wood stoves eligible for this $300.00 Federal Biomass Tax Credit?
A: No. The 2011 Residential Energy Efficiency Tax Credit specifies that only wood stoves that are at least 75% efficient will qualify.
Q: How will the 75% wood stove efficiency requirement be determined?
A: The 75% efficiency requirement will be measured using the “Low Heat Value” of the wood, or LHV. This method of calculating efficiency excludes the energy required to vaporize water in the wood, thus making the effiency rating higher than HHV (High Heat Value).
Q: Do your wood stoves qualify?
A: Yes. Our stoves have been efficiency tested by an independent testing lab under the Lower Heat Value protocol. All of our wood stoves surpassed 75% (efficiency results varied between 85.1% and 90.9% depending on the model). The official certificate is available on our website.
Q: I am building my own home. Can I get the tax credit as part of my new home construction?
A: No. The tax credit for biomass stoves applies to your existing, principal residence only. New construction and rentals do not qualify. However tax credits for geothermal heat pumps, small residential wind turbines, and solar energy systems are available for new construction as well as existing homes.
Q: When does this tax credit go into effect and how long will it last?
A: The tax credit was signed into law on December 16, 2015 and made retroactive for qualifying stove purchases/installation made in 2015, and applies to qualifying biomass stoves purchased and placed in service through December 31, 2016. The sales receipt must indicate that the purchase was made between January 1, 2015 and December 31, 2016.
Q: How will I use this biomass tax credit?
A: You can claim this credit on your 2015-2016 tax return. The credit decreases your tax liability. (It does this by increasing your refund or, if you owe taxes, it decreases the amount you have to pay).
Q: How is a Tax Credit different from a Tax Deduction?
A: A tax credit is more valuable than a similar tax deduction. A tax credit reduces the tax you pay, dollar-for-dollar. A tax credit decreases your tax liability. (It does this by increasing your tax refund or, if you owe taxes, it decreases the amount you have to pay.
Tax deductions - such as those for home mortgages and charitable giving - lower your taxable income.
Q: What documentation will I need?
A: We will provide a signed certification that the wood stove you purchased from us qualifies for the tax credit. The certification is available on our website as well. In addition to the certification we provide a copy of your sales receipt at the beginning of 2016 or 2017, when you will be filing your 2015 or 2016 taxes. These documents do not need to be filed with the IRS form and your tax return, but should be kept for your records. Only the official IRS form needs to be filled out and filed with your tax return paperwork. We provide a copy of the IRS form when it is available at the beginning of 2016-17, along with the copy of your sales receipt. Over the past two years we have provided our stove owners with a convenient “tax package” that includes all necessary documentation and instructions.
Q: Your literature lists some of your wood stoves at 72% EPA Efficiency. What makes you so sure that your stoves will qualify for the 75% minimum?
A: The EPA Efficiency is a “default” efficiency… in other words, every EPA Approved Catalytic Wood stove is presumed to be at least 72% efficient. Under the Low Heat Value efficiency testing standards proposed by the federal government for this tax credit, all of our stoves exceeded the 75% minimum efficiency required to qualify for the tax credit.
Q: Can I get the credit if I buy one of your gas stoves?
A: No the credit applies to “biomass” stoves and, unfortunately, not to our gas stoves.
Q: Can I get a tax credit for related items (i.e. chimney parts, installation materials, hearth pads, and so on) to get the maximum credit?
A: According to the EPA website (www.epa.gov/burnwise) “professional installation costs are included as long as installation is required for the proper and safe operation of the stove.” This seems to suggest labor costs and not specific materials can be included.
Q: Can everybody who purchases a qualifying product claim the federal biomass tax credit?
A: No. People who have zero tax liability may not qualify for the tax credit. People who have claimed $500 or more in tax credits dating back to 2006 may not qualify for this tax credit. We recommend consulting a qualified tax professional to determine if you are eligible to take advantage of this tax credit.