How To Qualify for the USA Energy Tax Credit

If Purchased in 2022
What is this tax credit?

• Effective Dates: The new tax credit under Sec. 25(D) of the U.S. Internal Revenue Code (“IRC” or “tax code”) is in effect from January 1, 2021 for qualifying purchases and installations completed on or after that date, through December 31, 2022.

• Credit Amount: 26% of the purchase and installation costs (including venting, blower, ash pan, trim kits, hearth pad, and labor), for 2021 and 2022 (with no cap or lifetime limit) under Sec. 25D of the U.S. tax code. Tax credit can add up to $2,000 or more!

• Qualifying Products: Any biomass-fueled heater (wood stove, wood insert, pellet stove or pellet insert) and is 75 percent efficient per the higher heating value (HHV) of the fuel.
• Any product ordered in 2021 that qualifies for the new Sec. 25(D) credit, but isn’t installed and paid for until 2022, can be claimed under the Sec. 25(D) credit on a 2022 tax return.
• The credit must be claimed on the tax return year in which the purchase of the product and installation is complete.

If Purchased in 2023-2032
What is this tax credit?

• Effective Dates: The new tax credit under Sec. 25(C) of the U.S. Internal Revenue Code (“IRC” or “tax code”) is in effect from January 1, 2023 for qualifying purchases and installations completed on or after that date, through December 31, 2032.

• Credit Amount: Creates a new tax credit of 30% (capped at $2000.00) of the purchase and installation costs (including venting, blower, ash pan, trim kits, hearth pad, and labor) for 2023 through 2032 (with no lifetime limit) under Sec. 25C of the U.S. tax code. Tax credit can add up to $2,000!

• Qualifying Products: Any biomass-fueled heater (wood stove, wood insert, pellet stove or pellet insert) and is 75 percent efficient per the higher heating value (HHV) of the fuel.
• The credit must be claimed on the tax return year in which the purchase of the product and installation is complete.

*Please consult with your Tax Advisor to confirm your eligibility for this Tax Credit.

How to Claim

• You will claim your credit when you file your federal income tax return
• Online/Software: Enter it into the Home Ownership & Residential Energy Credit section
• By Mail: Include the Lopi Tax Credit Certificate and Residential Energy Credit Form 5695.

Questions? Contact us today and we will be happy to assist you.