The payment that you received from the power company won't be considered taxable income for you. But you will need to determine what the energy credit that you received on your 2020 tax return would be with the reduced cost of installation from the rebate.
To do that you can go to your 2020 tax return in TurboTax and start to amend the return. You will not be filing an amended return (1040-X) but will use the program to see what the credit for home energy on Form 5695 will be after you enter the lower cost of installation.
Here are the instructions on how to amend the 2020 tax return.
After you have entered the lower cost of installation, the revised credit will be on Schedule 3, Line 5, Residential energy credits, Form 5695. Deduct that amount from the credit that you originally received to find the amount to enter as Other Income for 2021.
Here are instructions to enter Other Income:
To enter Other Income, please follow the steps below:
- Open your return.
- Click on Federal Taxes.
- Go to Wages & Income
- Scroll to the bottom under Less Common Income select Start (or Update) for Miscellaneous Income.
- Choose the appropriate category and enter your Other Income
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