The Ultimate Guide to the 2023 Biomass Tax Credit

The Inflation Reduction Act qualifies specific biomass appliances for a tax credit for the next ten years. But what does this mean for potential new pellet and wood stove owners?

In this blog, we will cover the parameters of this new tax credit, considerations when buying an EPA-certified wood or pellet stove, and the next steps for adding an eco-friendly, efficient stove to your home.

How Does The 2023 Biomass Tax Credit Work?

This news is yet another benefit for consumers interested in switching from other heating methods such as oil, gas, and electric — or replacing old, inefficient stoves — for a new stove burning renewable biomass fuels.

During the period beginning January 1, 2023 through December 31, 2032, taxpayers who install qualifying wood and pellet stoves will receive a 30% tax credit up to $2,000 annually, based on the full cost (purchase and installation) of the unit.

What Stoves are Eligible for a Federal Tax Credit?

Eligible stoves include those with a “thermal efficiency of at least 75% per the higher heating value (HHV) of the fuel” (HPBA). These stoves burn cleanly and expel extremely low emissions into the atmosphere, making wood and pellet stoves among two of the cleanest heating methods for residential homes.

For a complete list of qualified appliances, check out the products over 75% HHV efficiency located in the EPA’s database.

What is Biomass Fuel?

Biomass fuels are a sustainable heating option that convert plants and wood byproducts into usable energy. These fuel types generate heat when burned, referred to as “thermal biomass,” which is used to heat millions of homes across the United States. Many consumers are making the switch from expensive, environmentally-harmful heating fuels, such as gas, oil, and electric, for the numerous benefits of heating with pellets or wood.

How are Biomass Fuels Sustainable?

Pellets are a great option for those looking for fuel with a very small carbon footprint. “Wood pellet manufacturers extend the value and lifespan of these materials by converting them into a high-quality engineered heating product which displaces the use of fossil-derived heating oil and propane as well as their carbon consequences,” according to the Pellet Fuels Institute.  By heating with a renewable, low-carbon heating solution, pellet stove owners are part of the solution, breaking the rising levels of carbon dioxide in our atmosphere.

Pellet stove insert installed in a home

How to Claim Biomass Stove Federal Tax Credit

To ensure you receive your tax credit, keep any paperwork related to the purchase and installation of the stove, plus the manufacturer’s federal tax credit certificate. These documents are essential for proving the stove tax credit eligibility, purchase year, stove cost, and the year that it was installed in your home.

Keep in mind that this tax credit is applied by the year the stove was installed into your home. If your stove was bought in one year, but installed a following year, you will claim the tax credit under the year it was installed, not purchased. For example, if you bought a Harman pellet stove in December 2023 and didn’t install it until February 2024, you will file it under the 2024 tax year.

For homeowners looking to add more than one qualified stove to their home, we recommend spreading out the purchases by separate calendar years to fully capitalize on the tax benefits offered through this credit.

How to Access the Manufacturer Federal Tax Credit Certificate

Each manufacturer producing qualifying stove appliances should supply a certificate that will be submitted will be submitted together with your sales and installation receipts. This certificate is the key to ensuring that your federal tax credit is deducted from your annual taxes. Normally, manufacturers upload this certificate to their website.

If buying a brand other than Harman, Quadra-Fire, or Vermont Castings, be sure to double-check that the certificate includes the necessary information:

  • Manufacturer’s name and address
  • The class of qualified energy property
  • Stove’s make and model number
  • Proof of eligibility statement
  • Manufacturer’s signature

If you have purchased a Harman stove, you can find a link to download the federal tax credit certificate here. For Quadra-Fire's certificate click here. For Vermont Castings' certificate click here.

How to Choose a Tax Credit-Qualifying Stove

When shopping for a new stove to replace an existing unit or switch from a different fuel source, there are many considerations to weigh. To make an informed decision, it is essential to understand what is best for your home, lifestyle and needs when it comes to keeping your home warm all season long. 

Considerations to keep in mind:

  • Cost
  • Fuel type
  • Ease of use
  • Size
  • Product material
  • Maintenance
  • Heat output

All in all, the best stove for your home is dictated by your values and priorities. There are a plethora of stoves on the market, which means the perfect stoves for your lifestyle and needs is out there — it just takes a little extra research and consideration to ensure a stove will be a good fit for your home. Keep in mind that the tax credit is just one of many benefits to buying a wood or pellet stove. These stoves add ambiance, home value, cost efficiency, reliability, and so much more to your space.

For more information on choosing the right stove for your needs, read this complete guide to pellet stoves.

Next Steps

Ready to make your stove dreams a reality? We are here to help! Harman offers numerous eligible pellet stoves and inserts in different sizes, materials, heat output, and more to ensure you find the perfect pellet stove for your home.

Tax Credit Eligible Harman Pellet Stoves

If you are looking for a wood stove or additional models of pellet stoves, we recommend considering our sister brands, Quadra-Fire and Vermont Castings. Quadra-Fire carries both pellet and wood stove models, and Vermont Castings offers a robust line of eligible wood stoves. If you have any further questions, we recommend visiting a certified Harman dealer, who can lead you through every step of the way to find the perfect stove for your needs. 

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