Energy Efficient Property and Improvement Rebate Guidance Issued, Announcement 2024-19; IR-2024-97

The IRS has issued an announcement that addresses the federal income tax treatment of amounts paid for the purchase of energy efficient property and improvements. Taxpayers who receive rebates for the purchase of energy efficient homes are not required to include the value of those rebates as income on their tax returns, however they would need to reduce the basis of the property when they sell it by the amount of the rebate.

The Inflation Reduction Act (IRA) statutory language describes performance-based incentives and electrification product subsidies as rebates. The IRS has provided that amounts received from the Department of Energy (DOE) home energy rebate programs funded through the IRA will be treated as a reduction in the purchase price or cost of property for eligible upgrades and projects. Accordingly, the consumer that has received an IRA rebate would not be required to report the value of the rebate as income.

Announcement 2024-19

IR-2024-97