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posted Feb 15, 2024 11:06:26 AM

Heat Pump Water Heater Rebate. Write off before or after cost?

Received a Rebate for installing a heat pump water heater. Can I write off on my taxes the total amount or minus the rebate recevied from my local energy company?

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1 Replies
Expert Alumni
Feb 15, 2024 11:34:29 AM

Per IRS: When calculating your credit, you may need to subtract subsidies, rebates, or other financial incentives from your qualified property expenses because they're considered a purchase price adjustment.

 

Rebates are subtracted from qualified expenses if all of these apply:

  • The rebate is based on the cost of the property
  • It comes from someone connected to the sale such as the manufacturer, distributor, seller or installer
  • It isn't given as payment for services you provide

irs.gov