The Inflation Reduction Act, now signed into law, will change the tax credit for wood furnaces as of Jan. 1, 2023. The credit in 2023 will be 30% with a maximum of $2,000 and can be taken in addition to the $1,200 tax credit for building envelope upgrades and energy audits. The efficiency qualification remains the same at 75% or more.
In everyday terminology, you get the full $2,000 tax credit on the furnace purchase alone. You would be eligible for up to an additional $1,200 on expenses associated with your installation (chimney, ducting, hired labor, etc.).