DAKSY said:
10% credit for the purchase of a 75% efficient biomass heating appliance in 2011, capped at $300
Credit applies to purchase price only and is not extended to installation...
I just thought I would pass on some info about the 2011 Tax Credit for wood stoves. I have been preparing my return, and have read up on it. It seems like a lot of dealers, posters, and websites are telling people that the credit is for 10% of the purchase up to $300. Turns out this is incorrect.
For wood stoves it is a straight $300 maximum credit on the total purchase price. Instead of trusting some random website, I read up on the actual IRS rules and the bills passed by Congress to make sure. Here's what I found...
From IRS form 5695:
Nonbusiness Energy Property Credit (Part I)
You may be able to take a credit equal to the sum of:
1. 10% of the amount paid or incurred for qualified energy efficiency improvements installed during 2011, and
2. Any residential energy property costs paid or incurred in 2011. However, this credit is limited as follows. (
> This is what the wood stoves fall under)
• A total combined credit limit of $500 for all tax years after 2005.
• A combined credit limit of $200 for windows for all tax years after 2005.
• A credit limit for residential energy property costs for 2011 of $50 for any advanced main air circulating fan; $150 for any qualified natural gas, propane, or oil furnace or hot water boiler; and $300 for any item of energy efficient building property.
The confusion seems to stem from the 2009-2010 Tax Credit which was set up as 30% of both section 1 (qualified energy efficency improvements like widows, doors, insulation, etc.) and section 2 (residential energy property costs like water pumps, wood stoves, etc.). But when they extended the tax credit to 2011, they specified that the 10% would only be for the first section (improvements) and it doesn't mention any % for the section section (energy property). Just thought I'd let everyone know that it isn't 10% of the cost. ALso, as others on this thread have already confirmed, you can include the installation costs.
I also read through the American Recovery and Reinvestment Act of 2009 to make sure I was correct (this was applicable for 2009 & 2010):
SEC. 1121. EXTENSION AND MODIFICATION OF CREDIT FOR NONBUSINESS
ENERGY PROPERTY.
(a) IN GENERAL.—Section 25C is amended by striking subsections (a) and (b) and inserting the following new subsections:
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to 30 percent of the sum of—
‘‘(1) the amount paid or incurred by the taxpayer during such taxable year for qualified energy efficiency improvements, and
‘‘(2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during such taxable year.
...and the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 (new rules for 2011):
SEC. 710. CREDIT FOR NONBUSINESS ENERGY PROPERTY.
(a) EXTENSION.—Section 25C(g)(2) is amended by striking ‘‘2010’’ and inserting ‘‘2011’’.
(b) RETURN TO PRE-ARRA LIMITATIONS AND STANDARDS.—
(1) IN GENERAL.—Subsections (a) and (b) of section 25C are amended to read as follows:
‘‘(a) ALLOWANCE OF CREDIT.—In the case of an individual, there shall be allowed as a credit against the tax imposed by this chapter
for the taxable year an amount equal to the sum of—
‘‘(1) 10 percent of the amount paid or incurred by the taxpayer for qualified energy efficiency improvements installed during such taxable year, and
‘‘(2) the amount of the residential energy property expenditures paid or incurred by the taxpayer during such taxable year.
This website confirmed what I found:
http://ase.org/resources/energy-efficiency-home-and-vehicle-tax-credits
Technically this won't matter for people who buy a stove for over $3000, but I bought one for $2000, so it will make a $100 difference.
Hope this helps!