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HS
New Member

Are whole-home generators tax deductible?

We purchased and installed a 22 KW Generac whole-home generator in our main home during July 2018. Are these kinds of generators tax deductible? Total material and installation $7,500.

1 Best answer

Accepted Solutions
jblazar
New Member

Are whole-home generators tax deductible?

As far as I can tell, a whole house generator can be partially deductible if it is used to power medical equipment. You can deduct the difference between the cost and the increased value to your home as a medical expense. However, you can't take a renewable energy tax credit, like you can for solar panels.

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16 Replies
JohnW15
Intuit Alumni

Are whole-home generators tax deductible?

Unfortunately, there's no tax deduction available for this.

HS
New Member

Are whole-home generators tax deductible?

Thank you, John.
Ec19pz
New Member

Are whole-home generators tax deductible?

What if you are working from home and the generator is needed to power your home office when the power goes out?  Would it be deductible then?

Carl
Level 15

Are whole-home generators tax deductible?

No. A generator is not solar powered and doesn't meet the requirements to qualify for *any* tax breaks of *any* type on *any* return - state or federal.

 

jblazar
New Member

Are whole-home generators tax deductible?

As far as I can tell, a whole house generator can be partially deductible if it is used to power medical equipment. You can deduct the difference between the cost and the increased value to your home as a medical expense. However, you can't take a renewable energy tax credit, like you can for solar panels.

Carl
Level 15

Are whole-home generators tax deductible?

What you pay for a generator of any type is not tax deductible on any tax return, in any way, shape, form or fashion. However, if used to power certain medical equipment then it *MIGHT* qualify for a tax "credit", which is completely different from a deduction.  This is covered in IRS Publication 502 at https://www.irs.gov/pub/irs-pdf/p502.pdf starting on page 6. It concerns modifications to one's home for medical need. But I can't see anything there that comes close to a whole house generator for medical need. It does provide a list per-se of items that it can "Include but are not limited to". A portable generator for powering medical equipment in the home during a power outage would probably qualify as a medical expense. But I would question a whole house generator, and I would expect the IRS to question it to. It would just depend on the medical need justification most likely.
In my town where I live in FL there are lots of older retirees here that use portable generators for things like insulin pumps and oxygen, as well as to keep the fridge running to keep the insulin chilled. When a hurricane hits, it's a sure bet the power will be out for days, if not a few weeks. So for some the portable generator is a justifiable medical necessity. But the whole house generator is not.

 

Are whole-home generators tax deductible?


@Carl wrote:

..for some the portable generator is a justifiable medical necessity. But the whole house generator is not.


If a portable generator would be deductible as a medical expense, then a whole house generator would also be deductible but, as @jblazar wrote, the deduction for the whole house generator would be limited to the difference between its cost and the increased value to the house.

Are whole-home generators tax deductible?


@Carl wrote:

What you pay for a generator of any type is not tax deductible on any tax return, in any way, shape, form or fashion. However, if used to power certain medical equipment then it *MIGHT* qualify for a tax "credit", which is completely different from a deduction.  This is covered in IRS Publication 502 at https://www.irs.gov/pub/irs-pdf/p502.pdf starting on page 6.


Where are you seeing a credit in publication 502?

 

Qualified medical expenses are an itemized deduction subject to the 7.5% rule.

 

Modifications to one's home that are medically necessary might be deductible, but only to the extent they don't increase the value of the home.  If they increase the value of the home, then they are treated as adjustments to cost basis (like a new roof or new furnace) which may reduce the capital gains tax owed when the home is sold.  You may need to consult with a real estate professional to determine the amount by which the generator raises the value of the home.  Then, that remaining cost would be a deductible medical expense, but because of the 7.5% rule, you may not get any actual tax benefit from it.

 

 

Are whole-home generators tax deductible?

I installed a total home generator in 2021 to avoid power outages.  Also, it is required to power my CPAP machine which is medically required by my doctor to address sleep apnea.   Where in Turbo Tax do i plug this in?

LeonardS
Expert Alumni

Are whole-home generators tax deductible?

A whole-home generator can be deducted as a medical expense on Schedule A Itemized deductions.

The IRS allows all taxpayers to deduct their qualified unreimbursed medical expenses that exceed 7.5% of their adjusted gross income. You must itemize your deductions on IRS Schedule A in order to deduct your medical expenses.

 

You need to have clear proof that your physical or mental condition demands a stand-by whole-home generator.  A letter from your medical care provider stating the reason for needing a whole-home generator for power outages should be submitted with your tax return.

 

To enter your whole-home generator  and any other itemized deductions follow these steps:

  1. Sign in to your TurboTax account.
  2. Enter itemized deductions in the search box.
  3. In the results, box click on jump to itemized deductions.
  4. Follow the screen prompts to enter your whole-home generator expenses and any other itemized deductions.

 

 

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Are whole-home generators tax deductible?

@LeonardS 

@jpollock53 

You also need an appraisal. You can only deduct the portion of the generators cost that does not increase the value of your home. If it increases the value of your home, that is a home improvement and it is added to the cost basis of your home and may reduce your capital gains when you sell, but it’s not a medical expense deduction.

 

The IRS examples of medical improvements that usually do not increase the value of the home are things like grab bars and a walk-in shower.  A generator is a much more questionable purchase, because depending on where you live, a generator may be seen by potential buyers as giving significant additional value to the home.  If audited, you will need to prove to the IRS that the generator does not increase the value of your home or make it easier to sell your home, and that would require an opinion or appraisal from a real estate professional.

Are whole-home generators tax deductible?

@jpollock53 

I am also not convinced that a generator is medically necessary for a CPAP machine, because unlike a ventilator, you are not likely to suffer immediate harm if the CPAP shuts off in the middle of the night. And you can easily buy rechargeable batteries for CPAP machines for much less than the cost of a whole house generator.

 

And lastly, if you do claim the generator cost as a deductible medical expense, you can’t also include it as a home improvement when you sell the home.

Are whole-home generators tax deductible?

Are home generators a tax ductile or credit item

Are whole-home generators tax deductible?


@BonnieVaughn wrote:

Are home generators a tax ductile or credit item


If there is not a medical device in the home that is required to have power available on a 24/7/365 basis then there is not a deduction for a home generator.

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