Appliance eligibility requirements vary from state to state. Idaho, for example, requires that you remove an old stove to be eligible, or convert a fireplace, such as in Arizona. Alabama requires homeowners to convert their primary heating system to wood or pellets, and Maryland requires that the stove displace oil, electricity, or propane heat. Some programs now require stoves meet efficiency requirements to be eligible. Maryland and Vermont require stoves to be at least 70% efficient as listed on the list of EPA-certified stoves. Some towns or counties may provide additional incentives but this is not common.

Federal incentive
As of Jan. 1, 2023, there will be a 30% tax credit for wood heaters that are 75% HHV efficiency or higher. This credit will last for 10 years, through 2032. For the remainder of 2022, there is a 26% tax credit for stoves are 75% or higher. Thermal efficiencies can be found on the EPA database of certified stoves. Some manufacturers have used a wide variety of ways to define "75%" so if you care about purchasing a high efficiency stove, check the list of the EPA certified stoves to find third party-verified efficiency values. The federal tax credit includes installation and associated costs such as floor protection and vent pipe. Be especially wary of pellet stoves with lower efficiencies as this will translate into higher fuel costs.