2023 – 2032 Wood and Pellet Heater Investment Tax Credit (25C)

What is the Wood and Pellet Heater Investment Tax Credit?

High-efficiency biomass heating products qualify for a tax credit under Section 25(C) of the Internal Revenue Code (“IRC” or “tax code”). This 30 percent tax credit – capped at $2,000 – is available for appliances installed on or after January 1, 2023. Central Boiler Classic Edge 360, 560, 760, 960 HDX and Maxim M255 PE models qualify for the credit.

Homeowners that purchase and install a Classic Edge HDX or M255 PE model can claim the 30% tax credit, capped at $2,000, by using form 5695 when filing federal income taxes in the year the installation is completed.

Do I qualify for the Wood and Pellet Heater Investment Tax Credit?

Installation Date: To be eligible for the federal tax credit, install a qualifying Central Boiler outdoor furnace (currently the Classic Edge 360, 560, 760 and 960, and the Maxim M255 PE are qualified) on or after January 1, 2023. The furnace must be claimed on the tax return year in which the installation is complete.

Qualifying Outdoor Furnace Criteria: The outdoor furnace must be at least 75% efficient per the higher heating value (HHV) of the fuel. The Classic Edge 360, 560, 760 and 960, and the Maxim M255 PE all meet this requirement.

Residency Requirements: While previous biomass tax credits allowed only installations in primary residences to be claimed, the IRA permits biomass heaters installed in the US at a residence of the taxpayer (not necessarily the taxpayer’s principal residence) to receive the credit.

Does it matter if I pay up front or finance my Furnace?

It doesn’t matter if you pay for the furnace and installation up front or finance your purchase. Central Financing is available at participating dealers with very attractive financing options for the furnace and installation. Either way, you’re eligible for the tax credit.

What is a Federal Tax Credit?

A tax credit is a reduction of your federal income tax. If you had taxes withheld, you may get a refund. If you owe taxes, it may reduce what you owe.

How do I claim the Wood and Pellet Heater Investment Tax Credit?

The form you’ll need for filing for this credit is 5695. If you have questions or need help completing the form, contact your tax professional.

Download Form 5695 - 2023 Residential Tax Credits

Instructions for Form 5695 and Other Information: HERE

What paperwork do I need to keep for my tax record?

Keep your purchase receipt(s), including the cost of the furnace and installation. You should also have a copy of the Manufacturer’s Certification Statement stating the outdoor furnace qualifies for the credit and is at least 75% efficient (HHV). You can download the statement at CentralBoiler.com. You don’t need to send these with your tax return.


Both purchase and installation costs (e.g., piping and related materials, onsite labor) can be included in your total cost.


This summary information is provided as a convenience and may not be relied upon as a substitute for professional tax advice. Central Boiler, Inc. is not a tax advisor. Taxpayers claiming a tax credit should consult a tax professional with any questions. Central Boiler is not responsible or liable for the taxpayer's ability to receive tax credits.