Wood stove credit on IRS Form 5695

[mari]

I plan to take the tax credit for my EPA stove purchased last year, but I'm confused about the form. All the instructions that I can find online refer to line 5 of Form 5695 as "Qualified biomass fuel property costs" but that's not what the actual form says. Instead, it's something about battery storage. Can someone clear this up for me? https://www.irs.gov/pub/irs-dft/f5695--dft.pdf

 

[PantsOnFire]

For the wood stove credit on form 5695, Residential Energy Credits, you want

Part II Energy Efficient Home Improvement Credit,
Section B, Residential Energy Property Expenditures

Any of the tax filing software will probably fill out the form for you. I did mine by hand, so if you want the line by line instructions, let me know.

 

[mari]

For the wood stove credit on form 5695, Residential Energy Credits, you want

Part II Energy Efficient Home Improvement Credit,
Section B, Residential Energy Property Expenditures

Any of the tax filing software will probably fill out the form for you. I did mine by hand, so if you want the line by line instructions, let me know.

Thanks so much! Yes, I'd love the line by line instructions, this form is a bit dense.

 

[PantsOnFire]

For the wood stove credit on form 5695, you want

Part II Energy Efficient Home Improvement Credit
Section B, Residential Energy Property Expenditures

Line 21 a and b – check Yes. If you answer No to those questions, then you get nothing.
Line 21 c - Enter the address of the home where the wood stove was installed.
Line 26 a - Did you incur costs for a home energy audit …. Would assume that you would check No.
Line 29 c - Enter the cost of biomass stoves and biomass boilers. This includes the cost of the wood stove and from the instructions- any labor costs properly allocable to the onsite preparation, assembly, or original installation of the property.
Line 29 d - add lines 29a, b and c
Line 29 e - multiply 29d by 30%. This is that important number you have been waiting for.
Line 30 Add lines 28 and 29e
Line 31- Limitation based on tax liability. Enter the amount from the Energy Efficient Home Improvement Credit Limit Worksheet (see instructions on I5695-dft 2023, page 6).
This may be the amount from your 1040 line 18, but it depends on your tax and other credits, so you are on your own here.

For the amount on Line 32, enter the smaller of line 30 or 31. It will probably be the 30% amount of your stove cost. But it depends on what you have on line 31.

Copy the amount on Line 32 to Schedule 3 Additional Credits and Payments;
line 5b - Energy efficient home improvement credit from Form 5695, line 32.
Add up any other credits and put the total on line 8.
Copy that amount to your 1040 line 20.
Whew!

No tax expert here, no business trying to explain tax forms; this is just my interpretation of the 5695 form as it pertains to the wood stove credit. But I just did my taxes and the IRS accepted them, so I must have done it close to being right.

 

[mari]

Thanks so much, appreciate your help! I do my taxes by hand too, but this form had me befuddled.

 

[Ctwoodtick]

Hearth.com- everything you could ever want to know about wood heat and sometimes….tax help.

 

[PantsOnFire]

Thanks so much, appreciate your help! I do my taxes by hand too, but this form had me befuddled.

Your welcome. When you first look at that form, it’s what the? It contains energy credits for lots of things. You will find that the entries for the wood stove are just a small part of the form. I see that you found the same Instructions for Form 5695 that I did. The one that says Draft IRS Use Only.

 

[PantsOnFire]

Hearth.com- everything you could ever want to know about wood heat and sometimes….tax help.

Something about that 30% tax credit that gets people interested in doing their taxes.