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mchalmers2
New Member

Are utility rebates for energy saving improvements taxable?

 
4 Replies
JohnW222
Expert Alumni

Are utility rebates for energy saving improvements taxable?

No.  You do not need to include these rebates on your return.

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bisric99
New Member

Are utility rebates for energy saving improvements taxable?

I received three rebates from my power company in 2021.  The rebate total for 2021 was 682.33.  The first rebate was $30 for a new, energy efficient washer.  The  second and third rebate totalled $652.33 and were for 2 electric vehicle charger, both ChargePoint, that were installed for our plug-in hybrid and battery electric vehicle.

 

My power company issued me a 1099-MISC for $682.33 for the rebates.  I didn't think I was supposed to pay tax on the rebates.  Can you please advise?

bisric99
New Member

Are utility rebates for energy saving improvements taxable?

Will that not cause a flag on my tax return that I didn't claim a 1099-MISC?

DawnC
Employee Tax Expert

Are utility rebates for energy saving improvements taxable?

You can keep the documents with your records in case of an inquiry.   You might want to contact them and ask them why they sent you a 1099-MISC for non-taxable income and have them issue you a corrected one.   

 

Utility rebates  From the IRS

 

If you're a customer of an electric utility company and you participate in the utility's energy conservation program, you may receive on your monthly electric bill either:

  • A reduction in the purchase price of electricity furnished to you (rate reduction), or

  • A nonrefundable credit against the purchase price of the electricity.

The amount of the rate reduction or nonrefundable credit isn't included in your income.

 

If it is taxable (not likely) and you want to report it as Other Income, follow these steps to ensure TurboTax does not create a Schedule C - business return for you.    Form 1099 usually indicates self-employment income, so the software will try to force you to create one.    Follow these steps below to avoid that.   But I would contact the issuer before you enter it.  

 

To enter other reportable income, on a 1099-MISC form, follow these steps:

  1. Sign into your TurboTax account.

  2. Select Federal from the left side menu.

  3. Type 1099-Misc in the search bar and click on Jump to 1099-misc.

  4. On the Did you get a 1099-MISC? screen, select Yes.  If you come to the 1099-MISC Summary screen, select +Add Another 1099-MISC located under the Total.

  5. On the Let’s get the info from your 1099-MISC screen, enter the information on the form and Continue.  ($ should be in Box 3)

  6. On the Describe the reason for this 1099-MISC screen, enter a description (rebates).

  7. On the Does one of these uncommon situations apply?  select any option and continue with the onscreen interview until complete. 

  8. If you select None of these apply, you have a few more questions to enter.   Keep going.

  9. On the Did the XXX involve work that’s like your main job? screen, select No, it didn’t involve work like my main job.  If it’s like your main job, this may be self-employment income. 

  10. On the How often did you get income for XXX? screen, select I got it in 2021.  Note: If you have done this work in the past and plan on doing this in the future, this may be self-employment income. 

  11. On the Did the XXX involve an intent to earn money? screen, select No, it didn’t involve an intent to earn money and Continue.    If you are trying to make money, the income is self-employment.  

The income will appear on Line 8 of Form 1040, not subject to Self-Employment Tax, but it will be subjected to ordinary income tax.  

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