Fireplace Village gets lots of questions from customers purchasing wood stoves, fireplace inserts and pellet stoves about the current federal tax credits. Here are the questions that we hear the most:

What is the Biomass-Burning Stove Tax Credit?
This federal tax credit encourages people to make energy-conscious purchases that improve the energy efficiency of their home. It is an up to $1,500 credit you can get for buying a qualifying biomass-burning stove or fireplace insert between January 1, 2009 and December 31, 2010. Biomass simply means the stove uses wood or pellet fuel.

What is the difference between a tax deduction and a tax credit?
A deduction is an expense or amount you can subtract from your taxable income. A tax credit lowers your actual tax bill dollar-for-dollar, in this case by up to $1,500.

How is the value of this tax credit determined?
When you buy a qualifying biomass-burning appliance between January 1, 2009 and December 31, 2010, you get a tax credit of 30% of the total price, up to $1,500 dollars. So, for example, if your wood or pellet stove cost $5,000 (which can include installation), you can deduct $1,500 from the taxes you owe the government.

What hearth appliances qualify for the tax credit?
Any wood stove, wood burning fireplace insert or pellet burning stove that meets the 75% heating efficiency rating qualifies for this credit. This means that 75% or more of the stove fuel is converted into heat. This efficiency rating is usually included with the specifications and on the back of the stove or insert.

Are biomass stoves installed in new or vacation homes covered by this tax credit?
No. The credit only applies to your existing principal residence. New homes and vacation homes don’t qualify, nor do homes owned as rental units

How do I ensure that I can collect on my tax credit?
Save your receipt that proves you purchased the qualifying hearth appliance between January 1, 2009 and December 31, 2010. You’ll also need a manufacturer’s certification statement that states your product meets the 75% efficiency rating needed to qualify for this tax credit.
Fireplace Village or your authorized retailer will give you the manufacturer’s certification statement that must include:
o The name and address of the manufacturer.
o Identification of the class of qualified energy property (e.g., biomass-burning stove or insert).
o The make, model number and any other appropriate identifiers of the stove or fireplace insert.
o A statement that the hearth product is an eligible qualified energy property.
o A signature of a person able to bind the manufacturer to the above standards.

Are installation costs included in this tax credit?
Yes. Installation costs are included as long as professional installation is required for the proper and safe operation of the stove. We recommend using NFI certified installers or licensed chimney sweeps.

Where can I research and find more information about the energy efficiency tax credit?
Check out the IRS guidance relating to energy property and energy efficiency improvements as it relates to certified wood stoves, fireplace inserts and pellet stoves.

Fireplace Village is the largest wood stove and fireplace stove insert retailer in New Hampshire and New England. We are an authorized dealer for many leading stove and fireplace insert manufacturers such as Jotul, Hearthstone, Napoleon and Vermont Castings. Stop by one of our New Hampshire locations to view our extensive wood, gas and pellet fired insert displays or visit us online.