5,000 per year; 20,000 total deduction
40% in the first year; 20% per year for next three years
This statute allows taxpayers an income tax deduction of 40% of the cost of a solar, wind, geothermal, and certain biomass energy devices used for heating or electricity generation. Taxpayers can apply this 40% deduction in the year in which the system is installed and can also deduct 20% of the cost each year for three years thereafter. The maximum deduction in any one year is $5,000. The total maximum deduction is $20,000.
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.)