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Shopping Tools: U. S. Tax Credit Overview

 

Tax Credit FAQs

 Frequently Asked Questions

Q: What is a tax credit and how does it work? How is it different from a tax deduction?
A: After making the purchase and installing the unit, you claim the credit on your federal tax return. Tax credits are different from tax deductions and in general, are more valuable. A tax credit reduces your tax liability. Depending on your tax situation, a tax credit can reduce the taxes you pay, or increase your tax refund on your tax return dollar-for-dollar. Tax deductions, such as those for mortgage insurance and charitable giving, lower your taxable income.

Q: When did the tax credit go into effect and how long will it last?
A: The tax credit was reinstated on January 1, 2013, and is valid for qualifying purchases made between January 1, 2012 and December 31, 2013.

Q: How do I know if a product qualifies for the credit?
A: All products that qualify are indicated on this site. The information is also available from your local Quadra-Fire, Harman Home Heating, Heat & Glo or Heatilator dealer.

Q: Does the 10% tax credit apply toward costs incurred for required installation labor and piping?
A: No.

Q: How do I apply for the tax credit?
A: After purchasing the product, download and print the official "Manufacturer’s Certificate", which certifies that the product qualifies for the tax credit. If you have additional questions, please consult your tax advisor or the Internal Revenue Code.

Q: What are the financial advantages of using a wood or pellet burning appliances for heat in my home?
A: You can significantly reduce your heating bills for years to come by using one of these products to heat part, or all, of your home. As we’ve experienced in recent years, prices for natural gas, propane and oil can fluctuate greatly, at times spiking at very high levels. With an energy efficient stove, fireplace or insert, you can turn down the thermostat on your central heat and heat the areas where you live the most with wood or pellets. For whole home pellet heating, Harman offers furnaces and boilers that work either in conjunction with your central heat system, or can function as stand-alone units.

Q: Am I contributing to a greener Earth by heating with biomass?
A: Yes. Wood, pellets and other biomass materials are renewable fuels, derived from trees and plants. Burning biomass is considered carbon-neutral, as only the carbon the plant absorbed when growing is released. Whether the wood burns or decomposes, the same amount of carbon is released, with virtually no green house gas effects. In fact, burning wood in one of our EPA-certified clean-burning units eliminates approximately 75-percent of carbon emissions associated with fossil fuel heating. By doing so, you’re not only controlling air pollution, but helping to decrease our country’s dependence on foreign oil. All biomass products that qualify for the tax credit also qualify within green building programs, such as LEED® for Homes.

Q: Are wood burning fireplaces, stoves and inserts efficient?
A: Yes. Technological advancements have made today’s wood stoves, fireplaces and inserts significantly more efficient than dated models. The EPA-certified wood burning products that qualify for the tax credit are highly efficient, producing more heat with less fuel to provide warmth and comfort for many hours. They are the cleanest burning wood appliances available today, with low ash and minimal outside air emissions. This is made possible by complete combustion, consisting of high temperatures, ample oxygen and sufficient burning of gases before being exhausted. Complete combustion can also eliminate the accumulation of creosote, a flammable chimney residue.

Q: How efficient are pellet burning units? Are they easy to use?
A: Pellet appliances have great heating efficiencies and low emissions. Quadra-Fire and Harman pellet units burn cleaner than virtually any other biomass fueled appliance and produce minimal particulate matter, helping to control air pollution. They are easy to operate with built-in fuel hoppers and feeding devices that move pellets in small groups to the combustion chamber, where they produce a beautiful, robust fire. The various models have control panels or wall-mounted thermostats to control heat and minimize fuel consumption. Many models are capable of burning additional biomass materials, such as corn, wheat and switch grass.

Q: What are pellets made from and how expensive are they?
A: Pellets are made from compacted sawdust, wood chips, bark, agricultural crop waste, waste paper and other organic materials. Burning them to produce heat is a constructive way to reuse material that may otherwise go to a landfill. Wood pellets are typically purchased in 40-pound bags for between $5 and $7, providing up to 24 hours of steady heat. When compared to the volatile prices of electricity, gas and oil, the price of a bag of wood pellets has remained predictable for the past decade. Pellets can be purchased at a variety of places – from big box hardware retailers to local farm and garden stores.


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