Jøtul wood stoves that qualify for the Biomass Tax Credit!

These Jøtul wood stoves qualify for the Biomass Tax Credit!

Due to the enactment of the Budget Reconciliation Act (also known as “One Big Beautiful Bill”), the IRS Energy Efficient Home Improvement tax credit will expire after December 31, 2025. Consumers buying eligible wood stoves, pellet stoves, or larger residential biomass heating systems can still claim the 30% tax credit – capped at $2,000 annually – based on the full cost (purchase and installation) of the unit if it is installed prior to the end of the year.

What is this tax credit?

• Definition: The Energy Efficient Home Improvement Tax Credit is a federal tax credit available to homeowners who make qualified energy-saving improvements to their primary residence in the United States.
• Effective Dates: The tax credit under Sec. 25(C) of the U.S. Internal Revenue Code (“IRC” or “tax code”) took effect on January 1, 2023, for qualifying purchases and installations completed on or after that date, through December 31, 2025.
  • As of July 4, 2025, the credit will expire after December 31, 2025.
• Credit Amount: The credit allows taxpayers to claim 30 percent of the purchase and installation costs (capped at $2,000 annually) for qualifying products made in tax years 2023 through December 31, 2025.

Qualifying Products: 

• Biomass-fueled heaters (e.g., wood and pellet stoves)
  • Must meet 75% efficiency or higher, based on the Higher Heating Value (HHV) of the fuel.
  • As of 2025, the EPA-certified wood heater database must be referenced to verify eligibility.

New in 2025: 

• Qualified Manufacturer (QM) Number required when filing taxes for purchases made in 2025.
  • This number will be provided by the retailer once the IRS finalizes the issuing process.(Jotul Number M8T2)

How to Claim your tax credit on Wood Stoves purchased AFTER December 31, 2022:

Taxpayers may claim the credit on their federal income tax return form in the year in which product installation is complete. The credit is a reduction of total income tax owed. This is a non-refundable tax credit available for individuals who pay federal taxes and who make energy-conscious purchases to improve the energy efficiency of their home.

If your tax owed is reduced to zero by this credit, but you still have money left to claim, it the balance cannot be carried over to the next tax year to further reduce your tax burden in the future.

You should always consult a tax professional as individual situations may vary.

Paper Filing: The credit can be claimed on IRS Form 5695 on line 5, "Qualified biomass fuel property costs." 

Electronic Filing: If you are using tax filing software, the credit generally will be found under the "Credits" section of the Federal portion (Home and Vehicles– Residential Energy Credit or Credit Carryforward). On H & R Block, the credit is not under "Residential Energy Credits;" it can be claimed under the "Alternative Energy Credit." This is on the page after "Residential Energy Credits" after you indicate "No" when asked if you've made a purchase that qualifies for the "Residential Energy Credit." 

PAPERWORK: What paperwork should a consumer retain for their personal tax records?

You should retain (1) the sales receipt and any installation paperwork and (2) the manufacturer’s certification statement (if not available, documentation that the heater is at least 75 percent HHV efficient). 

The sales receipt and installation documentation demonstrates that you purchased and completed installation of the qualifying heater during the effective period of the credit. The retailer from whom you purchased the qualifying heater should also provide you with a manufacturer's certification statement indicating that the product qualifies for the tax credit. You aren't required to have a certification statement in order to claim the tax credit. A screenshot or printout of the product manual page listing the efficiency as at least 75 percent efficient per the HHV is sufficient.

The certification statement should contain the name and address of the manufacturer; the class of qualified energy property; the make, model number and any other appropriate identifiers of the heater; a statement that the product is eligible; and a declaration, signed by a person currently authorized to bind the manufacturer in these matters (e.g., I attest that I have examined this certification statement, and to the best of my knowledge and belief, the facts are true, correct, and complete.).

Tax Credit Certificate (FOR PRODUCTS PURCHAED BETWEEN DEC 31,2022 - Dec 31, 2024)

Tax Credit Certificate  (FOR PRODUCTS PURCHASED AFTER Dec 31, 2024 - Dec 31, 2025)