You need to use IRS Form 5695. Put $300 in line 22A and then use Line 52 to show that amount on your 1040 form. Click here for more advice (or consult with a tax professional as we cannot and do not give tax advice.) For more background and details about the tax credit, read on.
Alliance for Green Heat, January 2, 2013 - Congress passed a bill addressing parts of the Fiscal Cliff, and it included a reinstatement of the $300 tax credit for biomass heaters that are 75% efficient using lower heating value. Another provision of the bill extended the wind production tax credit for one more year.
The biomass stove provision allows the full cost of the equipment and installation up to $300 for stoves bought in 2013 and it is retroactive, so that all eligible stoves purchased in 2012 can also get the credit. This means that every stove purchase will be able to collect the full $300 tax credit because all EPA certified stoves cost more than $300 and virtually every EPA certified stove claims to meet the 75% efficiency threshold. However, a taxpayer could not collect the full $300 if they have already recieved tax credits under this provision in previous years and the total amount would be over $500.
This credit was allowed to expire at the end of 2011 and H.R. 8 extends it through December 31, 2013. In addition to the purchase price, consumers can include the cost of professional installation which is important to the proper and safe operation of biomass stoves.
The bill language that makes it retroactive did so by just extending the credit that existed in 2011, through December 31, 2013:
SEC. 401. EXTENSION OF CREDIT FOR ENERGY-EFFICIENT EXISTING HOMES.
(a) IN GENERAL.—Paragraph (2) of section 25C(g) is amended by striking ‘‘December 31, 2011’’ and inserting ‘‘December 31, 2013’’.
The Alliance for Green Heat applauds the reinstatement of the tax credit for wood and pellet stoves. "This modest tax credit is important for low and middle-income consumers who need an affordable alternative to fossil fuels," said John Ackerly, President of the Alliance for Green Heat.
"However, when tax payer money is used for incentives, we believe it should go to the cleanest and most efficient stoves on the market, not all stoves on the showroom floor. The 75% efficiency standard is virtually meaningless because manufacturers can use any number of calculations to render all stoves eligible.This is a disservice to consumers who may unwittingly buy a 50% or 60% efficient wood or pellet stove and not enjoy the cost savings they expected," Ackerly said.
The provision relating to biomass heating equipment is part of a much larger package of energy efficiency equipment. Despite efforts by some to increase the maximum rebate amount and make other changes to the biomass equipment and all the other pieces of equipment, Congress just extended the language that Congress had approved in 2010.
This tax credit extension for energy efficiency equipment, including windows, insulation and other HVAC equipment, is estimated to cost the US government $2.2 billion dollars. The Alliance is trying to get the exact amount that the biomass heating equipment costs.
More details about the tax credit will be included in the Alliance for Green Heat's January newsletter, which will be sent next week.