There are several tax credit programs for homeowners who make energy-efficient upgrades to their homes. You may have heard of energy incentives for homeowners who install solar panels or upgrade their air conditioner or water heater to a more efficient model. A recent (and long-fought) addition to these energy incentives is the Wood and Pellet Heater Investment Tax Credit (ITC). If you were considering upgrading to an energy-efficient wood or pellet heater, now is the time to do it! Ready to learn more about this tax credit? Energy Center-Manhattan Pool has the answers. The following information will be a little cut and dry. However, we want to provide you with everything you need to know about this valuable wood and pellet stove tax credit.
What does the tax credit entail?
So, how does the tax credit work, anyway? It’s not a tax deduction, since it’s not reducing your taxable income. However, like all tax credits or incentives, it does take a little bit off the total tax you owe.
According to the Hearth, Patio, & Barbecue Association (HPBA), the Wood & Pellet Heater Tax Credit enables consumers to claim a 26% tax credit of the purchase amount of an energy-efficient wood or pellet stove. This includes the total cost of the unit – both purchase and installation. There is no limit to this total cost.
Let’s say you owe $5,000 in taxes before you’ve applied the tax credit. If the total cost of the unit (purchase and installation) is around $5,770, 26% of that is about $1,500. Apply that amount as your tax credit, and your taxes will be reduced from $5,000 to $3,500.
The tax credit is effective as of January 1, 2021, so you can take advantage anytime starting now.
How long is it available?
This tax credit is available through December 31, 2023. However, the percentage of the credit does go down after some time. In 2021 and 2022, it will remain at 26%, but in 2023 will lower down to 22%. So while there’s no rush, you certainly don’t want to miss this opportunity.
How and where do I find a qualifying stove?
This tax credit requires that the wood or pellet heater must be at least 75% efficient per the higher heating value (HHV) of the fuel. The HPBA does provide a database for searching for a qualifying stove, but you can also find one here at Energy Center-Manhattan Pool! We have a wonderful selection of Hearth & Home wood and pellet stoves that are as cozy and warm as they are energy-efficient. We did a quick search ourselves on which models were the most efficient, but stop by anytime to see our qualifying appliances in-stock.
Here at Energy Center-Manhattan Pool, we want our customers to be as informed as possible. Especially when purchasing a new energy-efficient fireplace or stove for your home! Reach out to our team if you have any other questions or would like more information about this wood and pellet stove tax credit. Come Find Your Gathering Place.