Rebates paid at the time of sale under two home energy rebate programs created in the Inflation Reduction Act are not includible in individual purchasers' gross income or cost basis, the IRS said earlier this month in Announcement 2024-19.
The announcement also includes coordination rules for taxpayers who want to claim a federal tax credit for those amounts under Sec. 25C.
The Inflation Reduction Act appropriated money and authorized the Energy Department to administer two rebate programs under Secs. 50121 and 50122, one for whole-house retrofits that save money and another for high-efficiency home electrification projects.
The IRS also explained how the rebates coordinate with the Sec. 25C credit, which allows taxpayers to receive a credit of up to 30% of certain qualified expenditures that go toward energy-efficient improvements to their homes.
The credit generally is capped annually at $1,200 with another $2,000 annual cap for improvements that include electric or natural gas heat pumps, electric or natural gas heat pump water heaters, or biomass stoves and boilers. Read more.