Introduction
Are you ready to enjoy comfy heat and save on your tax bill? The IRS has updated the biomass tax credit, which went into effect on January 1, 2025. This move is an effort to advance the federal government's objective to encourage homeowners to use energy-efficient biomass fuels for heating. Biomass fuel is a renewable resource that is widely available and easy to utilize. The recently published changes affect eligibility and unit specifications. We’ve created a handy one-page PDF breakdown of the changes that you can find here. Read on to find out how you can benefit from the updates to the biomass tax credit!
What’s Changing?
The most significant functional change is the update to the way that the thermal efficiency requirement is validated. The requirement itself is not changing; it will remain 75% aligned with rigorous Environmental Protection Agency (EPA) standards. However, to receive the credit, the stove must appear on the EPA’s list of units confirmed as operating at 75% efficiency or greater.
Another major component of the update is the change to stove identification requirements. Starting in 2025, taxpayers wishing to claim the tax credit on their 2025 taxes will need to have the stove manufacturer’s four-character Qualified Manufacturer (QM) number. Hearth & Home Technologies has been assigned the code and you can find it here along with a list of eligible products.
Starting in 2026, there will be a 17-character PIN assigned to each unit, which will need to be filed with your 2026 tax return. This PIN will not appear on your stove, but it will be contained in the paperwork that comes with your stove, so be sure to secure those documents.
Why It Matters to You
Biomass stove efficiency still must exceed 75%, based on EPA standard testing data for the stove. This standard requirement incentivizes stove manufacturers to consistently offer stoves that efficiently support sustainable energy goals. The added consistency will be helpful to consumers who are shopping for stoves, as these top-performing units burn with a very high minimum efficiency.
The tax credit offered by the IRS is generous: up to $2,000 for qualified biomass stoves. This credit does not have a lifetime dollar limit, so any time you install or upgrade a stove in the future while this credit remains in place; you’ll qualify if the stove meets the specifications. The biomass tax credit includes biomass stoves installed on or after January 1, 2023, until January 1, 2032.
Efficient stoves require less fuel to produce the heat needed to warm your home, so you’ll burn less material to achieve the desired results. That means that installing a biomass stove in your home will save you money on your monthly heating bill and save you money next tax season.
In addition, by promoting the use of high-efficiency biomass stoves, the tax credit helps reduce greenhouse gas emissions. Efficient stoves produce fewer emissions compared to less efficient heating methods, contributing to a reduction in the overall carbon footprint.
What Forge & Flame is Doing
Hearth & Home Technologies, has registered with the IRS as a qualified manufacturer to help make claiming your tax credit as smooth as possible. Our qualified manufacturer number is available here for you to submit with your tax filing return.
What Homeowners Should Do Next
Whether you’re thinking about installing your first stove or you’re looking to update a current unit, we have some tips for choosing an energy-efficient stove or insert that meets the new requirements.
● When comparing stoves or fireplace inserts, be sure to confirm that the higher heating value (HHV) exceeds 75%.
● Once you purchase your stove, keep your stove purchase receipt, your manufacturer’s tax credit certificate handy, and any invoices indicating the installation date and costs, as all this information will be required to submit for the tax credit.
● Download and save our qualified manufacturer number, which you will need to qualify for the tax credit for tax year 2025.
● Make note of your PIN details when purchasing a high-efficiency stove after 2025.
● Remember that the tax credit is applied by the year the stove was installed, not the year it was purchased.
● Check out the Forge & Flame blog and bookmark resources for updates and other relevant information.
Conclusion
These new IRS rules greatly benefit homeowners who are ready to use renewable biomass-burning stoves to bring cozy, comfortable heat into their homes. The rules simplify the tax credit process, ensuring that your purchase will pay off.
Explore our website or contact us today for more details on qualifying stoves and fireplace inserts. If you’d like to dive deeper into the details of the biomass tax credit, check out the resources below.
Qualifying Forge & Flame Products: https://forgenflame.com/collections/federal-tax-credit-qualifying-products
IRS Biomass Tax Credit Guidelines: https://www.irs.gov/pub/irs-drop/rp-24-31.pdf
IRS Energy Efficiency Home Improvement Tax Credit Information: https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit-qualified-manufacturer-requirements
