Up to $1500 IRS Tax Credit on Purchase of Biomass Fireplace
Don't overlook the rewards for thinking green. Read this New York Times article.
It’s one thing to favor clean energy and to want to reduce your carbon footprint. It may be quite another to put together enough cash to buy energy-efficient products like hybrid cars or electricity-efficient refrigerators — or to pay for an all-out home energy upgrade. But help is at hand. Thanks to new and expanded tax credits included in the federal stimulus package, certain energy-saving purchases may be more affordable for some taxpayers . . . MOREIRS Guidance on Tax Credit for Purchase of Biomass Stoves
On June 1, 2009, the Internal Revenue Service (IRS) issued guidance for the 30% consumer tax credit (up to $1500) for the purchase and installation of a 75-percent efficient biomass-burning stove.
In a letter to the IRS in February 2009, the Hearth, Patio, and Barbecue Association (HPBA) asked for specific guidance on a number of issues related to this credit. The HPBA is confident that this minimal guidance is sufficient. It is the HPBA's understanding that the IRS is not asking for further testing if a stove manufacturer has self-certified using valid test data.
Some important points of the tax credit are:
To be considered, a stove must use the burning of biomass fuel to heat a dwelling unit or to heat water for use in such a dwelling unit, and have a thermal efficiency rating of at least 75% as measured using a lower heating value;
Installation is covered, as long as it is a requirement for the stove's proper and safe functioning;
This consumer tax credit is 30% (up to $1500) for the purchase and installation of a 75% efficient stove, and is available in both 2009 and 2010;
The tax credit is an aggregate, i.e., the total $1500 can include other energy efficient items. For instance, if a consumer claims $900 on a new stove, then he will have $600 to purchase additional energy saving products in the same tax year;
If a taxpayer uses the entire $1500 tax credit on a competing product then they cannot use it for a biomass stove in that same tax year;
This credit applies only to existing principle residences;
Manufacturers must provide a certificate of qualification for each product as required in the guidance which can be obtained for the customer to use;
Taxpayers must retain the certification statement for tax recordkeeping purposes, but the certification is not required to be attached to the tax return;
Prior purchases made between January 1, 2009, and June 1, 2009 are covered if the manufacturer offers a certificate of qualification for the product;
If a manufacturer has documentation that a stove has already achieved the required efficiency rating, no further testing is required;
The IRS has not stated that inserts are covered, or are not covered, but based on EPA's practice of treating inserts and freestanding biomass stoves in a similar fashion, manufacturers may choose to include inserts.
If you would like to read the entire guidance, IRS Notice 2009-53, Non-business Energy Property, it can be found on www.hpba.org. or www.irs.gov/pub/irs-drop/n-09-53.pdf.
