Federal taxes on state efficiency rebates

[ppanish]

I received rebates of around $650 on the purchase of energy efficient products (refrigerator and heat pump water heater). Do. I have to pay federal taxes on this, and if so where does it go?

[DavidD66]

No, rebates are not taxable, unless you previously took a tax deduction for the amount.  They are just a return of your money.  You don't enter them on your tax return.

[Opus 17]

The rebate is not taxable. However, when you are getting ready to sell your property, if you are looking to include the cost of home improvements as an adjustment to your cost basis, you must reduce the cost of the improvement by the amount of any federal, state, or utility rebates. 

[ppanish]

Thanks for your reply, much appreciated.