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tax credit question, do you claim the FULL cost of the <u>installed</u> stove?

Post in 'The Hearth Room - Wood Stoves and Fireplaces' started by sksmass, Feb 1, 2012.

  1. sksmass

    sksmass Member

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    I am filing an amended 2010 tax return because I forgot to take the tax credit for my stove install. I know, dumb!

    Anyway, I am going through my receipts for the stove and had the following expenses:
    1. The stove itself
    2. Professional installation of stove and SS liner
    3. Hearth materials and labor (tile, durock, micore, plus install labor)
    4. Steel blockoff plate

    Clearly I can claim item 1 as part of the credit. But what about items 2-4? That is, can you only claim the stove or can you claim the FULL cost of the stove PLUS the required modifications to actually USE the stove safely and efficiently?

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  2. usner21

    usner21 Member

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    I believe you can only claim the cost of the stove itself but I am not 100% on that.
  3. Bocefus78

    Bocefus78 Minister of Fire

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    My accountant included the install. I didnt do a block off or alter my hearth so Im clueless on that. From what I read (going by memory--not always good lol) , whatever it takes to make it pass code and clearances was able to be included.....with that said, nobody knows if your hearth was acceptable before. Include it. I highly doubt anyone at the IRS knows what a block off plate is either.....put it in there!
  4. usner21

    usner21 Member

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    Cool I can up my credit a little this year then!
  5. DAKSY

    DAKSY Patriot Guard Rider Staff Member

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    If your tax return is for calendar year '09 (filed in '10)
    you can include EVERYTHING required to ensure it is
    a safe & code compliant install, except any sales tax
    added to the price. So, the cost of the stove, connector,
    chimney, hearthpad & labor qualifyfor the 30% credit.

    If your tax return is for CY '10, only the appliance qualifies
    for the 30% credit
  6. Huntindog1

    Huntindog1 Minister of Fire

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    Whats the credit for 2011? 10%? Stove only?
  7. DAKSY

    DAKSY Patriot Guard Rider Staff Member

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    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...
  8. Huntindog1

    Huntindog1 Minister of Fire

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    Thanks Daksy!!
  9. kallsop

    kallsop Member

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    This is from 2011 IRS form 5695 instructions:

    Residential energy property costs. Residential energy property
    costs are costs of new qualified energy property that is installed on
    or in connection with your main home that you owned during 2011
    located in the United States. Include any labor costs properly
    allocable to the onsite preparation, assembly, or original installation
    of the energy property. Qualified residential energy property is any
    of the following.
    • Certain electric heat pump water heaters; electric heat pumps;
    central air conditioners; natural gas, propane, or oil water heaters;
    and stoves that use biomass fuel.


    I take that to read that the labor costs are eligible for the 10% credit. I would also argue that necessary costs, such as required chimney liners, are a part of the energy property and therefore are also eligible. Probably the IRS will not give a darn because at 10% credit with a $300 biomass stove limit, it's small beer for them.
  10. bsj425

    bsj425 Burning Hunk

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    well with some very extensive research this is what I got from the current credit from the IRS

    .04 Labor Costs. Section 25D allows the credit for expenditures for labor costs
    properly allocable to the onsite preparation, assembly, or original installation of
    residential energy efficient property described in section 3.01 of this notice and for
    piping or wiring to interconnect such property to the dwelling unit


    and I wish I would of found this BEFORE I filed my taxes since I went by what the dealer said saying it covers the stove only and no installation.
  11. Woodrow

    Woodrow New Member

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    Is there any tax credit available for 2012?
  12. firebroad

    firebroad Minister of Fire

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    For purchases made in 2011: Aggregate amount of credit is limited to $500. Taxpayer is ineligible for this tax credit if this credit has already been claimed by the taxpayer in an amount of $500 in any previous year.

    I was all ready to claim my credit for my install when I realized that over the past 5 years I had claimed various credits for windows, doors, insulation, etc. I.E., I am screwed...

    Always a day late and a dollar short.
  13. SolarBrian

    SolarBrian Member

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    Where did you get $500 from firebroad? As kallsop posted, I'm pretty sure the 2011 biomass appliance credit is capped at $300 credit.
  14. firebroad

    firebroad Minister of Fire

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  15. Mastoo

    Mastoo Member

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    Yeah, I thought I'd be good for a $300 tax credit (2011) but turbotax just broke it to me that the windows I installed a couple years ago blew through some aggregate $500 max so no dice on the 2011. It did appear though that the window thing was windows only, no labor, but the fireplace would have been installed cost.
  16. Huntindog1

    Huntindog1 Minister of Fire

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    Turbo tax 2011 asks what you paid for the stove and says to add installation cost also.

    I had never claimed anything in the past.
  17. firebroad

    firebroad Minister of Fire

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    Pardon me if I sound ignorant, but am I to assume that some of you can get an EPA rated stove AND the expense of having it installed by someone for $500 or less? What did I do wrong?
  18. kallsop

    kallsop Member

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    The tax credit limit for biomass stoves is $300, not $500. That credit is calculated at 10% of the cost, so you can get 10% credit for the first $3000 of a stove installation, assuming you haven't previously claimed energy credits and used up a portion or all of your credit. For stoves, it looks like you can use the cost of the stove, install labor and other necessary system components e.g. chimney liner, towards the $3000 limit.
  19. firebroad

    firebroad Minister of Fire

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    Thanks for clearing that up. I still don't qualify, having received previous credits. :mad:
  20. jbt13

    jbt13 New Member

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    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!
  21. Free Monomoy

    Free Monomoy Member

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    Thanks for answering my questions. My $483 credit in 2010 for my new tankless water heater left me with a whopping $17 credit for my new stove when I had planned on $300. I didn't realize it was $500 over the last 5 years. My loss. ugh.
  22. DanCorcoran

    DanCorcoran Minister of Fire

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    One further clarification: you may only take the credit if you own your home. No credit if you rent, lease, etc.
  23. OhioBurner©

    OhioBurner© Minister of Fire

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    I wish I had known this last year. We bought our stove with the tax credit in mind. No one said it was an aggregate with the credit the year before. And we bought it from the same shop and asked about the credit and they knew we bought one the year before and claimed the whole thing, but they still said we could get the credit. Was a bit of a downer when our tax person said sorry $0 credit on your stove.
  24. crcurrie

    crcurrie New Member

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    What about if the stove is for a home that you own but is not your primary residence (e.g., vacation home)?
  25. DanCorcoran

    DanCorcoran Minister of Fire

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    My understanding is that the credit has been available only for your primary residence. Others may correct me.

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