The wood stove tax credit (25C): expired federally — what remains
Updated · Reviewed against the current StoveAtlas dataset
Short answer: the federal 25C tax credit for high-efficiency biomass stoves and boilers has ended. The One Big Beautiful Bill Act (Public Law 119-21, signed July 4, 2025) terminated the Energy Efficient Home Improvement Credit (Internal Revenue Code §25C) for property placed in service after December 31, 2025. A stove or boiler installed on or before that date could still qualify if the paperwork and installation-year requirements were met; installations after it do not qualify for this federal credit. Check state and local programs separately — they are not affected by this federal change.
What the credit covered while it existed
From 2023 through the end of 2025, IRC §25C allowed a federal income tax credit of 30% of the purchase and installation cost, capped at $2,000 per year, for qualifying wood and pellet stoves, wood and pellet boilers (hydronic heaters), and other biomass-fueled heating appliances. The credit applied to a broader annual cap and eligibility list under §25C generally, of which biomass stoves and boilers were one qualifying category. Because it was a tax credit rather than a rebate, it reduced the amount of federal income tax owed for the year the appliance was placed in service, not the purchase price at checkout.
The ≥75% HHV efficiency threshold
To qualify, a biomass stove or boiler needed a certified thermal efficiency of at least 75%, measured against the higher heating value (HHV) of the fuel — the same HHV efficiency figure the EPA Certified Wood Heater Database publishes for every model (see how to read EPA certification data). That threshold is why 75% HHV became the informal bar for a "high-efficiency" stove in marketing and buying guides, including on this site — the heaters certified at 75% HHV or higher lists still tag which models cleared it, since that efficiency figure remains a genuinely useful performance marker even though the credit built on it has expired.
What changed, and when
The One Big Beautiful Bill Act (OBBBA), signed into law on July 4, 2025, amended or terminated several energy-related federal tax credits established or extended by the 2022 Inflation Reduction Act, including §25C. Section 25C had previously been extended through 2032; OBBBA moved its termination date up by several years. Per IRS guidance, §25C does not apply to property placed in service after December 31, 2025 — "placed in service" generally means installed and ready for use, not merely purchased or ordered, so the completion date of installation is what matters for eligibility, not the invoice date.
If you installed and placed in service a qualifying biomass stove or boiler on or before December 31, 2025, consult a tax professional and the current IRS Form 5695 instructions about claiming the credit for that tax year — this guide is not tax advice, and it does not cover the documentation requirements (manufacturer certification statements, timing rules) in full.
What to check instead, going forward
- State and local incentives. Some states, utilities, and local air quality districts run their own rebates or wood-stove change-out programs (often aimed at replacing older, uncertified heaters), independent of the federal tax code. These vary widely and change on their own schedules — check your state energy office or local air district rather than assuming the federal expiration affects them.
- Manufacturer or retailer promotions. Point-of-sale rebates or financing offers are separate from any tax credit and don't require the 75% HHV threshold or IRS filing.
- Efficiency still matters on its own terms. Even without a credit attached, HHV efficiency and emission rate (g/hr) directly affect fuel cost and burn quality — the EPA certification data guide explains what to look for regardless of tax treatment.
This page will be updated if federal law changes again; the "Reviewed against the current dataset" line above reflects when it was last checked.