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Energy Efficient Home Improvement Credit

Every business in our industry should have a clear path to long-term growth—and a seat at the table to shape government regulations.

Beginning in 2023, consumers buying highly efficient wood or pellet stoves or larger residential biomass heating systems may be eligible to claim a 30% tax credit – capped at $2,000 annually – based on the full cost (purchase and installation) of the unit. The credit runs through December 31, 2032. The 10-year term and 30 percent credit have been big components of HPBA’s advocacy push for the Biomass Thermal Utilization (BTU) Act over many years.

IRS GUIDANCE WEBSITE
IRS FAQ DOCUMENT
retailer webinar slides and recording

What is this new tax credit?

  • Effective Dates: The new 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, 2032.
  • Credit Amount: Creates a new tax credit of 30 percent of the purchase and installation costs (with a $2,000 annual cap with no lifetime limit) for tax years 2023 through 2032.
  • Qualifying Products: Qualifying products (any biomass-fueled heater) must have a thermal efficiency of at least 75 percent per the higher heating value (HHV) of the fuel.
    • December 2024 update: Beginning in the calendar year 2025, the EPA-certified wood heater database must be referenced.
      • Also new for 2025:  When filing your taxes for 2025, every consumer will need a number known as a “Qualifying Manufacturer” number or QM. That number will be supplied by the retailer once the IRS system for issuing them is finalized sometime in the middle of 2025.
      • The QM is NOT needed when filing your 2024 taxes.

        Contact the Government Affairs Department with any questions on the tax credit program.

*FREE*
Retailer Starter Pack

Here’s what’s included:

  • Free NFI course to help you boost sales
  • Government affairs podcast link
  • Discount code for our yearly HPBExpo

Don’t keep running on the hamster wheel without any help. Instead, join a community that can foster your growth and become a leader who shapes the future of our industry.

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