Fireplace Tax Deduction: How Does it Work?

Did you know there’s a tax deduction for installing a fireplace? Find out more about it here!

The U.S. government offers a tax credit for people who install a high efficiency wood or pellet fireplace in their homes.

The U.S. Biomass Tax credit allows for a tax credit of 26% of the purchase and installation costs for eligible products purchased and installed between January 1, 2021 and December 31, 2022. For eligible products purchased and installed between January 1, 2023 and December 31, 2023, the tax credit is reduced to 22% of the purchase and installation costs.

Any eligible product purchased in 2022 but installed in 2023, can be claimed on a 2022 tax return. Products must be claimed on the tax return year in which the product installation is complete.

What do I need to do in order receive my tax credit?

Purchase an approved unit, then download and print the official Manufacturer’s Certificate (below). This shows that your product qualifies for the U.S. tax credit.

When filing your return, complete the IRS form F5695 with the necessary information and submit your sales receipt. The certificate proves authenticity when filing your return, but does not need to be submitted. The IRS does require that you hold the certificate for your personal records.