Wood Stove Tax Credit?

[Hexa Fox]

Hey guys, so I was hoping to find some information on this. I have gotten very different answers to basically everyone I have spoken to. I am also not very good with taxes. To keep this short, I plan to file very, very little income this year so I am either paying no tax or very little. I have been looking at pretty expensive wood stoves so some clarification would be welcome.

So my question is, if I am not planning to pay anything on my taxes this year, can I still get the $2,000 credit back or is this a $2,000 refund that I can only get credit back towards taxes what I would have paid? I appreciate any help.

 

[ericm979]

I think this is the one: https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit

"The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years."

I think some states have incentives for switching from old dirty stoves to EPA stoves.

 

[snobdds]

You can't get back more than you put in.

 

[Hexa Fox]

I think this is the one: https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit

"The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years."

I think some states have incentives for switching from old dirty stoves to EPA stoves.

I think this is the one: https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit

"The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years."

I think some states have incentives for switching from old dirty stoves to EPA stoves.

This is what I thought, thanks for confirming with me gentlemen.

 

[Patrick1903]

You can't get back more than you put in.

Unless you’re talking about social security.

 

[snobdds]

Unless you’re talking about social security.

SS uses credits based upon how much you contributed over your working years. If you were a contract employee your entire life, you would have no SS coming to you.

I know a few self employed contractors that never paid into SS and therefore they will never get a SS check. Nobody gets out of paying the Medicare tax. At 65 you will get part A.

 

[kshansen]

Anyone know of a place to find out what states have this wood stove tax credit? I have an old Vermont Casting stove that I use for 90% of my heat.

 

[ericm979]

SS uses credits based upon how much you contributed over your working years.

Yes. It says that in the document that SS sends to older people not on SS every year showing your contributions and explaining what you'll be getting at various retirement ages.

If you were a contract employee your entire life, you would have no SS coming to you.

If you're paid as an independent contractor (not W-2) you are supposed to pay the "self employment tax" which is the employer part of SS contributions and Medicare contribution.

https://www.irs.gov/businesses/smal...oyment-tax-social-security-and-medicare-taxes
If you do that you're contributing to SS. Someone who did that for their entire working life would get SS. SS lists my income and contributions for the years I was self employed.

I did contracting and consulting and ran my own business so I have seen all the aspects of self employment. I don't know how one would go about paying taxes as a self employed person without paying the "self employment tax" SS and Medicare part of it. You'd have to not file at all to avoid it.

 

[Patrick1903]

SS uses credits based upon how much you contributed over your working years. If you were a contract employee your entire life, you would have no SS coming to you.

I know a few self employed contractors that never paid into SS and therefore they will never get a SS check. Nobody gets out of paying the Medicare tax. At 65 you will get part A.

Really I meant the entire SS system as a whole.

 

[rocco611]

Anyone know of a place to find out what states have this wood stove tax credit? I have an old Vermont Casting stove that I use for 90% of my heat.

The only current tax credit I know of is the federal biomass credit. (not state) 30% tax credit if you purchase a qualifying high efficiency wood stove or pellet stove. Here is a pretty good explanation

https://www.hpba.org/Advocacy/Biomass-Stove-Tax-Credit

 

[Patrick1903]

The only current tax credit I know of is the federal biomass credit. (not state) 30% tax credit if you purchase a qualifying high efficiency wood stove or pellet stove. Here is a pretty good explanation

https://www.hpba.org/Advocacy/Biomass-Stove-Tax-Credit

Good info. Also important to remember that this is a non-refundable tax credit up to $2k. So if you owe less than $2k in taxes, you will not receive the full amount of the credit (assuming you were going to receive the full $2k based on your purchase/install. You would have to spend $6,667 in eligible expenses to receive full credit amount of $2k (i.e. 30%)). Or you will not receive the credit if you receive a refund normally - is my understanding (I'm not a CPA!).

"The credit is nonrefundable, so you can't get back more on the credit than you owe in taxes. You can't apply any excess credit to future tax years." https://www.irs.gov/credits-deductions/energy-efficient-home-improvement-credit