Tax Credit FAQ Fact Sheet Burning Stoves

12 March 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.