04/23/2024

New IRS Guidance on Tax Treatment for Energy-efficient Rebates

These rebates apply to those made on homes

The Inflation Reduction Act (IRA) introduced and broadened several incentives aimed at encouraging taxpayers to boost their use of renewable energy sources and embrace various energy-efficient upgrades. Notably, the legislation allocates funding of nearly $9 billion towards home energy rebates.

Although the rebates are not currently accessible, numerous states are anticipated to roll out their programs in 2024. Additionally, the IRS has recently issued vital guidance (Announcement 2024–19) outlining its approach to the tax treatment of these rebates.

Home Energy Rebates

The home energy rebates are available for two types of improvements. Home Efficiency Rebates apply to whole-house projects that are predicted to reduce energy usage by at least 20 percent. These rebates are applicable to consumers who reduce their household energy use through efficiency projects. Examples include the installation of energy-efficient air conditioners, windows and doors.

Please select this link to read the complete article from OSAP Partner Clark Schaefer Hackett (CSH).