2011 TAX CREDIT

The government has extended the Tax Credit in 2011, but the amount of credit is much lower, changing to 10% of the price of the appliance only, not including labor, up to $300.

The qualifications are:

• The credit is for biomass heating appliances: pellet stoves, pellet inserts, wood-burning heating stoves, and wood-burning fireplace inserts.
• The appliance must be installed in an existing primary residence, not a new house or rental property.
• The stove or insert must have a minimum efficiency rating of 75% as certified by the manufacturer.
• The appliance must be an EPA approved biomass stove.

Homeowners should keep the manufacturer’s certificate and invoice from the installer to give to their accountant and keep for their records, but do not need to file these items with their tax forms. A copy of the certificate can usually be obtained from the manufacturer’s website.

This credit reduces the amount of tax you owe for 2011 dollar for dollar. The credit is a reduction of total income tax at the bottom of your return, up to $300.  Consult your tax accountant for details.

Consumers who plan to purchase an alternative heating appliance in 2011 should plan early and have the stove installed prior to September 1 to avoid the busy season for hearth stores and chimney sweeps.  Manufacturers plan and build stoves starting in January of each year to prepare for the next fall season. The later in the year, the longer it takes to get a stove.

Homeowners should check the credentials of the installer to make sure they are qualified, properly licensed, and insured before doing the work.  Ask the installer for a copy of this license if your city requires it.  Often insurance companies will require that installation is done by a Certified and licensed installer as well. 

The only training available in the U.S. for installers is directly from the manufacturer or through two national organizations: The National Fireplace Institute and the Chimney Safety Institute of America.  To find a Certified Woodburning or Pellet Specialist, visit the National Fireplace Institute website at www.nficertified.org. To find a Certified Chimney Sweep, visit the Chimney Safety Institute of America website at www.csia.org or the Midwest Chimney Safety Council at www.mcsc-net.org.

Tips from the Midwest Chimney Safety Council:

• The MCSC recommends that wood burning or pellet inserts be installed only in masonry fireplaces, never in a prefabricated fireplace.  
• Always have an inspection completed by a CSIA Certified Chimney Sweep prior to purchasing a new appliance.
• Always have a stainless steel flue liner installed with a wood-burning insert.
• Only have the installation done by a Certified and licensed professional.