Installation must be complete before the end of 2025! Please make sure to get your new install before the end of the year if you want to take advantage of this tax credit.
If you’ve been considering upgrading to a high-efficiency wood stove or pellet stove, the clock is ticking. The Federal Biomass Stove Tax Credit, originally set to run through the end of 2032, will now end earlier in 2025. This means homeowners have a limited window to take advantage of a 30% tax credit (up to $2,000) on qualifying appliances and installation costs.
What Is the Biomass Stove Tax Credit?
The credit was introduced under the Inflation Reduction Act to encourage the installation of high-efficiency biomass heating systems. Qualifying units must:
Be EPA-certified with at least 75% thermal efficiency (HHV).
Burn wood, wood pellets, or other biomass fuels.
Meet specific clean-burn and emissions standards.
This credit can be applied to:
The cost of the appliance (wood stove or pellet stove).
Professional installation, including chimney or venting.
Necessary materials for safe installation (hearth pads, vent pipe, etc.).
Why Is the Credit Ending Early?
We are just as sad as you are that this tax credit is ending. It was a wonderful incentive for hard working folks to get an extra benefit from burning wood or pellet.
From the Hearth Patio and Barbeque Association: “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.”
Why Act Now?
Maximize Savings – A $6,500 installation could yield a $1,950 tax credit in 2025.
Beat Installation Rush – Many stove dealers and installers will be booked solid as the deadline approaches.
Lock in Winter Comfort – Modern wood and pellet stoves offer efficient, reliable heat and can serve as a backup during power outages.
Increase Home Value – A professionally installed, EPA-certified stove adds appeal and functionality.
Choosing the Right Stove Before the Deadline
When selecting your unit, look for:
EPA Certification – Required for the credit.
Proper Sizing – Match the stove to your home’s heating needs.
Installation by Certified Professionals – NFPA 211 and NFI standards ensure safety and efficiency.
Key Dates
January 1 – December 31, 2025 – Last eligible purchases and installations.
Tax Filing for 2025 – File IRS Form 5695 with proof of purchase and manufacturer’s efficiency certification.
Final Takeaway
If a wood or pellet stove has been on your wish list, the early end of the Federal Biomass Stove Tax Credit makes 2025 the year to act. Delaying could mean missing out on thousands in savings and losing a rare opportunity to invest in an efficient, eco-friendly heating solution.
