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Tax Credit FAQ Fact Sheet Burning Stoves

Joseph Coupal - Friday, March 12, 2010
Tax Credit FAQ Fact Sheet

What is the Biomass-Burning Stove Tax Credit?

This federal tax credit encourages people to make energy-conscious purchases that improve the energy efficiency of their home. It is an up to $1,500 credit you can get for buying a qualifying biomass-burning stove or fireplace insert between January 1, 2009 and December 31, 2010. Biomass simply means the stove uses wood or pellet fuel.

What is the difference between a tax deduction and a tax credit?

A deduction is an expense or amount you can subtract from your taxable income. A tax credit lowers your actual tax bill dollar-for-dollar, in this case by up to $1,500. In general, a tax credit is more valuable than a similar tax deduction.

How is the value of this tax credit determined?

When you buy a qualifying biomass-burning appliance between January 1, 2009 and December 31, 2010, you get a tax credit of 30% of the total price, up to $1,500 dollars. So, for example, if your wood or pellet stove cost $5,000 (which can include installation), you can deduct $1,500 from the taxes you owe the government.

What appliances qualify for the tax credit?

Any wood- or pellet-burning stove that meets the 75% efficiency rating qualifies for this credit.

Benefits of Wood Burning Pellet Stoves

Joseph Coupal - Friday, March 05, 2010
Pellet Stoves and inserts are probably the easiest wood burning stove to operate. Typically, they only need to be loaded with wood pellets 1-2 times per day depending on the size of stove. Loading the pellets is a matter of pulling out the hopper and pouring the pellets from a bucket into the hopper area. Pellet stoves do not produce any smoke so you do not need to worry about "smoking out" a room and dealing with those issues. The exterior of the stove is very safe in a home setting. There is virtually no external heat on the outside of the stove as it's burning. Because of this, you can place the stove as close as a few inches away from the wall, plus it makes it safe for houses with children and pets.

Other Advantages include:

Because wood pellets are so condensed and are low moisture, the pellet burning process is very efficient. This also results in less harmful gasses being released into the air. Others may appreciate that wood pellets are the byproduct and not a primary product that is produced from recycled wood at sawmills and they usually come from sawdust, wood shavings and some forms of nuts. Of course the big advantage of pellet stoves is the costs of fuel. Pellets sell for $3 for 40lbs. Which can last up to two days depending on temperature and blower settings. There could be signifcant cost savings in your heating bill.

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