It’s official: The wood and pellet stove tax credit was officially extended last week when President Obama signed the Consolidated Appropriations Act of 2016 (H.R. 2029) on Dec. 18, 2015.

The bill reauthorizes, among other credits, the Sec. 25C tax credit for non-business energy property. Included in this section is the 10 percent tax credit, capped at $300, for residential biomass stoves that are at least 75 percent efficient. The bill did not change any aspects of the tax credit, only moving the expiration date of the credit from Dec. 31, 2014, to Dec. 31, 2016.

This means that all qualifying purchases made in 2015 and 2016 are eligible for the tax credit.

The tax credit for biomass stoves would not have been included in this large piece of legislation if not for the proactive lobbying efforts spearheaded by HPBA staff, funded by HPBA’s Solid Fuel Hearth Appliance Section, and outreach made by HPBA members urging members of Congress to support the credit.

Since April of this year, HPBA staff has met with over 20 Congressional offices urging them to support extension of this important tax credit. We also successfully worked to eliminate language, which was supported by outside non-profit organizations, which would have dramatically limited the number of appliances qualifying for the tax credit.

Details and How to Claim the Tax Credit

More information about the biomass stove tax credit can be found at www.hpba.org and any further questions about the credit may be directed to Rachel Feinstein.

Two other extended credits that may be of interest

The Sec. 179 business expensing credit has been permanently extended. Section 179 of the Internal Revenue Code allows businesses to deduct the full purchase price of qualifying equipment and/or software bought or financed during the tax year. That means if you buy (or lease) a piece of qualifying equipment, you can deduct the full purchase price from your gross income.

The list of qualifying equipment is broad – vehicles, manufacturing machinery, software, computers, furniture, tangible personal property used in business, etc.This legislation permanently extends the Sec. 179 credit and increases the annual deduction limit from $25,000 to $500,000.

The bonus depreciation tax deduction has been extended through 2019. All businesses will be able to depreciate 50 percent of the cost of equipment acquired and put into service during 2015, 2016 and 2017. Then bonus depreciation will phase down to 40 percent in 2018 and 30 percent in 2019.