New tax credits for 2021

[stoveliker]

You are mistaking "getting money back" for "getting money when your tax bill was already zero". The latter is called "refundable". This credit is not refundable.

When you do your taxes, you see how much your tax bill is, and how much was withheld for that during the year. If more was withheld than your tax bill is, you get a refund. With this tax credit, that amount of $$ is added to your refund. That is what you see.

However, if you do your taxes, and your tax bill was $0, you will *not* get the 26% in your pocket. The tax credit here is subtracted from your bill, but won't make the number negative.

 

[PatrickWR]

Hi folks. Just chiming in to report that I successfully obtained the 26% credit for the purchase & install of my qualified EPA stove last year. Pretty painless, too - we used Turbotax and it's listed under the "Tax Credits" section.

 

[velocity1]

You are mistaking "getting money back" for "getting money when your tax bill was already zero". The latter is called "refundable". This credit is not refundable.

When you do your taxes, you see how much your tax bill is, and how much was withheld for that during the year. If more was withheld than your tax bill is, you get a refund. With this tax credit, that amount of $$ is added to your refund. That is what you see.

However, if you do your taxes, and your tax bill was $0, you will *not* get the 26% in your pocket. The tax credit here is subtracted from your bill, but won't make the number negative.

Ahhhhhhh I see now thanks for clarifying, in my mind (simple and almost like a toddler ) I viewed it as a refund since I'm getting my normal refund like any other year and then on top of that I'm getting an additional "refund" from the tax credit for the stove.

 

[stoveliker]

Yes, that "on top of" is the nice benefit you got from uncle sam because you bought an efficient stove. Enjoy!

 

[Tithis]

Filed my federal taxes with the credit yesterday. Tried to do it earlier, but Turbotax hadn't yet updated that section to include biomass.

 

[deiser]

Chiming in on this thread as I am researching and planning on purchasing a wood insert that qualifies for the 26% credit for my masonry fireplace, and fit the criteria of what I wanted out of the insert as well. I was interested in the Regency 2700, Osburn matrix 2700, lopi/fireplacex large next gen fyre. Unfortunately, none of these worked as the HHV is below 75%. I decided to contact all of the manufacturers and ask if they are recertifiying any of these models, or coming out with an updated model to replace these.
Regency told me that the 2700 just missed the HHV and the only qualifying insert is the I2500, and that is it at this point. Lopi/FPX ( Travis ) told me the evergreen is the only qualifying insert and they are looking at possibly reintroducing the hybrid fyre models but have no timeframe. Osburn, never responded to my email inquiries.
Where does that leave me? Stuck with not many options. Here in PA, there is not a ton of shops I can go to to view all of these inserts, and I refuse to just buy an insert online without being able to look at the insert itself. Im open to everyone’s suggestions, and opinions as well.

 

[begreen]

Some Drolet's and Osburns recently qualified for the tax credit.
(broken link removed to https://www.drolet.ca/file/Drolet_Tax_Certificate.pdf)
https://sbiweb.blob.core.windows.net/media/6902/tableau-tax-credit-osburn-2022.pdf

 

[Parallax]

I've spoken to someone in product development at Pacific Energy and they're working on it. They are trying to get various stoves qualified in the next few months. I'm hoping they get the T5 over the line so I can buy one while the credit remains in place.

 

[EbS-P]

I've spoken to someone in product development at Pacific Energy and they're working on it. They are trying to get various stoves qualified in the next few months. I'm hoping they get the T5 over the line so I can buy one while the credit remains in place.

I think the test favors smaller stoves as they have less mass to heat. Is there a non cat on the EPA list 2 cu ft or larger?

 

[Parallax]

I think the test favors smaller stoves as they have less mass to heat. Is there a non cat on the EPA list 2 cu ft or larger?

If you're asking about PE, I don't know. I'm just interested in the T5 (or T6 if they create an enamel version). Didn't ask about other stoves though I believe some may already be certified or very close to certification.

 

[EbS-P]

If you're asking about PE, I don't know. I'm just interested in the T5 (or T6 if they create an enamel version). Didn't ask about other stoves though I believe some may already be certified or very close to certification.

I just looked at the list. The evergreen firebox is the only 2+ cu ft no cat stove on the list. Not sure how often it’s updated. Getting the T5 would be a really big deal.

 

[Parallax]

I just looked at the list. The evergreen firebox is the only 2+ cu ft no cat stove on the list. Not sure how often it’s updated. Getting the T5 would be a really big deal.

That's what I'm waiting for.

 

[begreen]

I think the test favors smaller stoves as they have less mass to heat. Is there a non cat on the EPA list 2 cu ft or larger?

Yes, there are some big 3+ cu ft Drolets/Osburns on the 75%+ list now. The Osburn 2000 & 3500 are there along with the Drolet Escape 1800 & 2100 and Drolet HT3000. I'm hoping to see the PE Summit and T6 join this list.

 

[Parallax]

Yes, there are some big 3+ cu ft Drolets/Osburns on the 75%+ list now. The Osburn 2000 & 3500 are there along with the Drolet Escape 1800 & 2100 and Drolet HT3000. I'm hoping to see the PE Summit and T6 join this list.

Me too. I don't want a Drolet or an Osburn.

 

[begreen]

So diving deeper into how this happened, it looks like there is a serious question about SBI's position. They have decided to use the LHV value instead of the HHV. The 25D tax code for the 26% credit clearly states HHV.

The term "qualified biomass fuel property expenditure" means an expenditure for property-
(ii) which has a thermal efficiency rating of at least 75 percent (measured by the higher heating value of the fuel).

 

[Parallax]

So diving deeper into how this happened, it looks like there is a serious question about SBI's position. They have decided to use the LHV value instead of the HHV. The 25D tax code for the 26% credit clearly states HHV.

The term "qualified biomass fuel property expenditure" means an expenditure for property-
(ii) which has a thermal efficiency rating of at least 75 percent (measured by the higher heating value of the fuel).

The PE folks said they're submitting their stoves to EPA for testing. I wouldn't trust a rating that came only from the manufacturer. I'd want to know that EPA was on board. Presumably the IRS would go along with an EPA rating.

 

[begreen]

The PE folks said they're submitting their stoves to EPA for testing. I wouldn't trust a rating that came only from the manufacturer. I'd want to know that EPA was on board. Presumably the IRS would go along with an EPA rating.

Agreed. I am wondering what is behind SBI's challenge to the language of the tax code.

 

[BKVP]

Agreed. I am wondering what is behind SBI's challenge to the language of the tax code.

Just over 3 weeks ago, a senior EPA staff person made a few comments related to this discussion. The comments were made in the presence of dozens of industry staff.

EPA does not regulate efficiency. EPA posts efficiency from manufacturer test reports. Only the IRS can audit the process of those issuing certificates stating compliance with tax credit requirements.

Some have questioned whether the language in 25D was specific and requires 75% overall based upon HHV or if any test run hits 75%, the model qualifies.

The EPA staff person made it clear there were concerns that not all test reports indicated that efficiencies were being calculated using B415.1, as intended.

THESE COMMENTS ARE NOT ISOLATED TO ANY ONE MANUFACTURER MENTIONED IN THIS THREAD, RATHER A GENERALIZATION OF INDUSTRY REPORTING.

 

[Parallax]

Somewhere I saw a list of stoves that were supposedly approved for the tax credit. Given what a large number we're talking about, I wouldn't want to buy without knowing for sure that my stove qualified.

 

[mellow]

Once again it gets pushed to the end consumer to be on top of this, IF being audited by the IRS one would not find help contacting the stove manufacture (generalized statement).

caveat emptor

 

[begreen]

The EPA is not the final arbiter here, the IRS is. The language defining 25D appears to be vague enough that some mfgs. interpret it differently than the overall average HHV that the EPA posts. Apparently, there is precedent for this.

 

[EbS-P]

SBI is a big company. I do have some degree of trust in their interpretation. I am surprised that is has taken this long. I do think there must have been some changes somewhere in the government to make them take this route 18 months after it went into effect.

 

[Parallax]

Not a chance I would take. If EPA approves a stove as meeting the standard, hopefully the IRS wouldn't overrule and reject it. That's hard to imagine. A stove that isn't EPA approved is another matter. Unless the company is offering a guarantee (which I can pretty much guarantee they're not).

 

[begreen]

Not a chance I would take. If EPA approves a stove as meeting the standard, hopefully the IRS wouldn't overrule and reject it. That's hard to imagine. A stove that isn't EPA approved is another matter. Unless the company is offering a guarantee (which I can pretty much guarantee they're not).

As BKVP noted, the EPA does not regulate stove efficiency. Any residential woodstove sold today must have EPA certification. That is different from the somewhat ambiguous tax credit requirement. What is in question is how the HHV qualifier is determined, overall average or best case in testing.

 

[BKVP]

Again, EPA does not approve or regulate efficiencies, the calculations or anything else related to them.

They open the test report provided to them by the testing agency (lab) and do an edit cut paste of the efficiency number in that report.

EPA only review EMISSIONS requirements to see if they meet the standard (a term reserved for emissions only) not efficiency.