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What is this new tax credit?
Effective Dates: The new tax credit under Sec. 25(D) of the U.S. Internal Revenue Code (“IRC” or “tax code”) came into effect on January 1, 2021 for qualifying purchases and installations completed on or after that date, through December 31, 2023
Credit Amount: Creates a new tax credit of 26 percent of the purchase and installation costs (with no cap or lifetime limit) for tax years 2021 and 2022; moves down to 22 percent of purchase and installation costs in 2023 (under Sec. 25D of the U.S. tax code)
Qualifying Products: Require qualifying products (any biomass-fueled heater) must have a thermal efficiency of at least 75 percent efficient per the higher heating value (HHV) of the fuel. The credit is for any biomass heater (wood and pellet stoves, inserts, furnaces, boilers, masonry heaters, installation costs, labor, etc.) that are at least 75 percent efficient per the higher heating value of the fuel.
Download the Tax Credit Consumer One-Pager or HPBA's Wood and Pellet Heater Investment Tax Credit webpage for more information or watch the webinar hosted on March 11. Please sign in to your HPBA account to view the video.
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