WASHINGTON — The Internal Revenue Service today updated frequently asked questions in Fact Sheet 2024-15 to addresses the federal income tax treatment of amounts paid for the purchase of energy efficient property and improvements. 

 

These FAQs supersede earlier FAQs that were posted in Fact Sheet 2022-40, on Dec. 22, 2022. 

 

The FAQs revisions are as follows: 

• General questions— Question 4 

On April 5, 2024, the Internal Revenue Service issued Announcement 2024-19 that addressed the federal income tax treatment of amounts paid for the purchase of energy efficient property and improvements. 

 

Generally, taxpayers who receive rebates for the purchase of energy efficient homes will not include the value of those rebates as income on their tax returns, however they will 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.” 

 

Announcement 2024-19 provides 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 receives an IRA rebate will not be required to report the value of the rebate as income.

 

More information about reliance is available.