Great News for Wood Stove Buyers
26% Federal Tax Credit for Qualifying Wood Stoves is Now in Effect!
Woodstock Soapstone Wood Stove 26% Federal Tax Credit Certificate Coming Soon
The Biomass Thermal Energy Council (BTEC) has been working to implement the Biomass Thermal Utilization (BTU) act for more than a decade - and it’s finally been realized! On December 21, 2020, Congress signed into law a 26% federal tax credit for wood stoves AND wood stove installations complying with these BTU revisions! Meaning more accessibility to clean-burning and modern wood heat for you. What makes a wood stove eligible for the huge 26% tax credit?
What makes a wood stove eligible for the huge 26% tax credit?
- The stove must meet the 2020 EPA standards
- The stove must have a minimum efficiency of 75% (HHV). More about High Heat Value (HHV) below.
- The stove must be purchased and installed in 2021-2022 (there will be a 22% credit available for 2023)
Woodstock Soapstone Model HHV
- 212 Survival Hybrid Wood Stove .............79.0%
- 211 Absolute Steel Hybrid Wood Stove .77.0%
- 210a Ideal Steel Hybrid Wood Stove .... ...77.0%
- 209a Progress Hybrid Wood Stove ....... ...78.0%
- 205 Fireview Wood Stove .. ............ .78.0%
- 204 Keystone Wood Stove ............... ..80.0%
- 202 Palladian Wood Stove ............... ..80.0%
Just How Far Will a 26% Credit Go? For a Woodstock Soapstone Progress Hybrid wood stove, the tax credit would realize about a $1,120 credit off of it’s roughly $4,300 retail price. Pair with this an additional 26% tax credit on the pipe and installation of the stove itself, and any Woodstock Soapstone wood stove becomes more accessible than it’s ever been.
Progress Hybrid Retail Cost (with Ash Pan): $4,305.00
Federal 26% Stove Tax Credit: -$1,119.30
Cost After Tax Credit: $3,185.70
Plus, the cost of installation qualifies for the same 26% credit. That means 26% on pipe, chimney and labor!
Q: Are all wood stoves eligible for this 26% Federal Wood Stove Tax Credit?
A: No. Only 2020 EPA certified wood stoves that have an EPA tested efficiency of 75% or greater qualify. All Woodstock Soapstone Co. Wood Stoves meet the more stringent standards.
Q: How will the 75% wood stove efficiency requirement be determined?
A: The 75% efficiency requirement will be measured using the “High Heat Value” of the wood, or HHV. High Heat Value (HHV) tests are run using cord wood with approximately 20% moisture content, generating efficiency results similar to what wood stove owner’s experience in their homes.
Q: What is the difference between High Heat Value (HHV) and Low Heat Value (LHV)?
A. Not all wood stove efficiencies are created equal. There are two different metrics for understanding wood stove efficiency: High Heat Value (HHV) and Low Heat Value (LHV). Woodstock Soapstone, like the EPA, uses High Heat Value (HHV) for our efficiency measurements.
High Heat Value (HHV) tests are run using cord wood with approximately 20% moisture content, generating efficiency results similar to what wood stove owner’s experience in their homes.
Low Heat Value (LHV) tests are run as if the wood had zero moisture content, generating results that look better, but aren't reflective of a typical wood stove owner's real world experience.
As an example, a stove tested using HHV may have an overall efficiency of 75% and an artificially higher efficiency of 80% when using the LHV metric.
Q: Do your wood stoves qualify?
A: Yes. Our stoves have been efficiency tested by an independent testing lab under the High Heat Value protocol. All of our wood stoves surpassed 75% .
Q: If I am building my own home. Can I get the tax credit as part of my new home construction?
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 21, 2020 and stoves purchased and installed in 2021 and 2022 will qualify for the 26% tax credit. In 2023 the tax credit reduces to 22%. The sales receipt must indicate that the purchase was made between January 1, 2021 and December 31, 2022.
Q: How will I use this BTU tax credit?
A: You can claim this credit on your 2021-2022 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 certificate, you will need a copy of your sales receipt showing your stove was purchased between January 1, 2021 and December 31, 2022 . These documents do not need to be filed with the IRS form and your tax return, but should be kept for your records.
Q: Can I get the credit if I buy one of your gas stoves?
A: No the credit applies to qualifying wood and pellet stoves and, unfortunately, not to our gas stoves.
Q: Can everybody who purchases a qualifying product claim the 26% Federal Tax Credit?
A: No. People who have zero tax liability may not qualify for the tax credit. We recommend consulting a qualified tax professional to determine if you are eligible to take advantage of this tax credit.