Residential Alternative Energy Tax Deduction
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$5,000 per year; $20,000 total deduction
40% in the first year; 20% per year for next three years
Eligible biomass energy devices include a pellet stove or EPA-certified wood stove if:
- it is in the taxpayer's residence,
- it replaces an old wood stove that does not meet EPA requirements,
- the purchase and replacement occurs within the same year, and
the old wood stove is dropped off at a Department of Environmental Quality (DEQ)-approved site within 30 days.
(Also applies to new natural gas or propane heating units that meet these criteria.)
The deduction for full year residents is calculated on the Idaho Supplemental Schedule 39R, section B, with the result transferred to Idaho Form 40. For part year and non-residents of Idaho, the deduction is calculated on Idaho Form 39NR, section B, with the results transferred to Idaho Form 43. Forms, instructions, and publications for the current and previous years can be found here.