Tax Credit for Wood Burning Stoves
A taxpayer can get a federal income tax credit of 30 percent off the purchase price of a wood burning stove with a maximum of $1,500 as of January 2011. The credit is available for many types of heaters that burn wood, including stoves that burn pellets of dried wood and other plant materials such as corn, fireplaces, and outdoor wood boilers that meet the federal program requirements.
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Restrictions
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To claim the wood burning stove tax credit, the taxpayer must install the stove in his primary home. According to the Internal Revenue Service, the primary home must be located in the U.S. The tax credit applies to the years 2009 and 2010, and the homeowner must also install the stove in one of those years.
Related Costs
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This credit includes setup costs, such as the cost to deliver the stove from a home improvement store to the taxpayer's house and a contractor's fees for installing the stove. The credit can include other materials if they are specially designed parts that help the stove use less energy. According to the Department of Energy, a hearth, chimney or stovepipe usually does not qualify for the wood burning stove tax credit.
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Efficiency Verification
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To claim the tax credit, the wood burning stove needs to have at least a 75 percent thermal efficiency rating. The Environmental Protection Agency does not keep a list of stoves that qualify for this tax credit. According to the Department of Energy, a stove buyer can request a Manufacturer's Certification Statement from the stove maker, stating that the wood burning stove meets the tax credit requirements.
Claiming the Credit
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The taxpayer can claim the wood burning stove tax credit by filing Internal Revenue Service Form 5695, Residential Energy Credits, with a federal tax return. If several taxpayers jointly own the home, each taxpayer can claim an equal portion of the $1,500 credit. A married couple can only claim a $1,500 total credit if both partners live in the same house, but each partner can claim a $1,500 credit if the partners claim different primary residences.
Tax Basis
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Installing a permanent improvement such as a wood burning stove increases the value of a home, which adds the value of the stove to the home's tax basis. Claiming this credit reduces the tax basis of the home, so the homeowner will owe more income taxes if she decides to sell the home because the gain from the sale will be higher, according to the Internal Revenue Service.
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