IRS Updates 2021 Tax Form for Wood and Pellet Heater Tax Credit
The IRS has updated its draft forms (but not instructions) for 2021 taxes, including the Residential Energy Credits tax form (Form 5695). Eligible taxpayers will be able to claim the new Section 25(D) tax credit for qualifying biomass stoves on line 5 of tax form 5695. Unlike in previous iterations of this tax form, biomass is specifically mentioned on the form and on its own line. The credit may be claimed in the year in which a qualifying product is installed. So, if a product is purchased in 2021 but not installed until sometime in 2022, the taxpayer would claim the credit (if the product is eligible and the person’s tax situation allows for it) on their 2022 tax return. HPBA has updated its consumer one-pager and website content to reflect these changes. Visit HPBA’s website for additional content and FAQs. Feel free to contact Rachel Feinstein with any questions that are not answered by our website.