The Federal Biomass Stove 25(C) Tax Credit: What It Covered and What Changed

The federal biomass stove tax credit is no longer available for new installations. Section 25(C) of the Internal Revenue Code was terminated by the 2025 budget reconciliation act, and the credit applies only to qualifying property placed in service through December 31, 2025. A wood or pellet stove installed in 2026 does not qualify for it.

This page has been updated to say that plainly, because the rule changed after it was first written and a stove is too large a purchase to plan around a credit that no longer exists.

If Your Stove Went In During 2025, Read This First

The credit did not vanish retroactively. It ended for property placed in service after December 31, 2025, so a qualifying stove that was installed and operational on or before that date can still be claimed on the return covering that tax year.

Two details matter if that is you, and both trip people up:

• Placed in service is the date that counts, not the date of purchase. A stove bought in November 2025 and installed in January 2026 is a 2026 installation.
• Tax year 2025 claims need a manufacturer PIN. The IRS requires the Qualified Manufacturer Identification Number, a four-character PIN, to be reported on Form 5695 for the item being claimed. Your manufacturer or your dealer can supply it. If you bought the stove from us and need that number, call and we will get it for you.

We are a stove supplier and not a tax preparer, so take the specifics to whoever files your return. What we can tell you is what the unit is, what it is rated at, and when it went in.

What the Credit Covered While It Existed

For the record, and because people still find this page looking for the terms:

The 25(C) credit, sometimes called the Wood and Pellet Heater Investment Tax Credit, was worth 30 percent of the combined cost of the appliance and the installation, capped at $2,000 in a year. It covered the stove, the venting and the labor rather than just the box. To qualify, an appliance had to run on wood or biomass fuel and carry a thermal efficiency rating of at least 75 percent measured by the higher heating value of the fuel, with a manufacturer certification statement to back it up.

It ran for qualifying property placed in service from January 1, 2023 through December 31, 2025. It replaced an earlier credit under Section 25(D), and the Hearth, Patio & Barbecue Association had pushed for it for years through the Biomass Thermal Utilization Act.

Federal energy credits for home heating have come and gone since the 1970s. This is the latest turn in a long cycle rather than a permanent change of direction, so it is worth checking the current rule at the time you buy rather than trusting an article, including this one.

What This Actually Changes About Buying a Stove

Less than people expect, and it is worth being clear about why.

A credit changes the purchase price. It does not change what the appliance costs to run, and for a heating appliance the running cost is the larger number over any reasonable length of ownership. The reason a high-efficiency stove was worth buying in 2025 is the same reason it is worth buying now: it converts more of the fuel into heat in the room and less of it into what goes up the flue.

The 75 percent efficiency threshold is still a useful line even though nothing hangs on it any more. It was set where it was because that is roughly where a stove stops being a fire and starts being a heater. The EPA maintains a searchable database of certified wood heaters listing each model with its emission rate and its efficiency, and it is still the right place to check a model before you buy it.

Two things are worth asking about instead of the federal credit:

• Manufacturer rebates and promotions. These are set by each brand, they change through the season, and they are not tax credits. Ask what is running on the model you are looking at rather than assuming.
• Utility and local programs. These vary by provider and by year. We do not administer them and we will not guess at what is available, but it is a fair question to put to your utility before you buy.

Where We Fit

We supply wood and pellet stoves from Jøtul, HearthStone, Osburn, Harman, Vermont Castings and Napoleon, and we install and service them. What our team can do is tell you a specific model's tested efficiency, what it will realistically heat, what your chimney or vent run has to be, and what the install involves.

What we will not do is sell a stove on the strength of a tax credit that has ended. If you read an older version of this page, or a competitor's page that still says the credit is available, that is the correction.

Come to Spring Lake or Grand Rapids to see the stoves running, or tell us about the room and we will work out what belongs in it.

Sources

• Internal Revenue Service, Energy Efficient Home Improvement Credit, for the credit applying to qualifying property placed in service on or after January 1, 2023 and before December 31, 2025, and for the $2,000 annual limit covering biomass stoves and boilers.
• ENERGY STAR, Biomass Stoves and Boilers Tax Credit, for 30 percent of project cost up to $2,000, the 75 percent higher heating value efficiency requirement, and the credit being effective for products purchased and installed between January 1, 2023 and December 31, 2025.
• Hearth, Patio & Barbecue Association, Energy Efficient Home Improvement Credit, for the credit expiring after December 31, 2025 following the 2025 budget reconciliation act, and for the Qualified Manufacturer Identification Number being required on Form 5695 for tax year 2025 claims.
• U.S. Environmental Protection Agency, certified wood heater database, for model by model emission and efficiency figures.

Nothing here is tax advice. Confirm your own situation with whoever prepares your return.