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$300 Tax Credit Extended for 2012-2013:
Good News for Stove Buyers!
There is good news for those considering the purchase of one of our highly efficient wood stoves in 2013. The Federal government has extended a tax credit 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 current tax credit is part of the tax package that was signed into law January 1, 2013. Tax credit has not only been extended for stoves ordered and installed in 2013, but it has been made retroactive for qualifying stove purchased and installed in 2012!
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, 2011, 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 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 2009-2011 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 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% 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 does not exclude the energy required to vaporize water in the wood. The previous tax credit employed the “Lower Heat Value” or LHV to calculate efficiency. The effect of using the HHV will be lower efficiency ratings in general for wood stoves. Some stoves that achieved 75% efficiency in the past will no longer qualify for the tax credit under the HHV test protocol.
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 went into effect January 1, 2013, but is retroactive for qualifying stove purchases/installation made in 2012, and applies to qualifying biomass stoves purchased and placed in service through December 31, 2013. The sales receipt must indicate that the purchase was made between January 1, 2012 and December 31, 2013.
Q: How will I use this tax credit?
A: You can claim this credit on your 2012-2013 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 2013 or 2014, when you will be filing your 2012 or 2013 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 2013-14, 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: Is the tax credit good for just wood stoves?
A: No, the tax credit is available for windows and doors, insulation, water heaters, roofs, and some other HVAC products. Terms of the credit are different for each product as to the amount and qualification requirements. Consult the dealer, distributor or manufacturer to confirm their products qualify.
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: I bought one of your stoves in 2007. Can I qualify for the 2012-2013 tax credit?
A: No. The 2012-2013 tax credit only extends to stoves purchased and installed between January 1, 2012 and December 31, 2013. Because the tax credit was technically on the record in 2007 you could have received a tax credit then. If you have taken the credit for a biomass stove in the past you cannot take it again in 2012-2013 for the purchase of another qualifying stove.
If you are interested in filing an amended tax return, please speak to a tax professional.
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 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.