Question

State rebate (not a State grant) for installing solar panels. Taxable?

Forum|Forum|4 years ago
March 29, 2022
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I received a State rebate (not a State grant) for installing solar panels. Is this taxable on Federal tax return? In Maryland they changed the name from "Clean Energy Grant Program" to the "Clean Energy Rebate Program." Is there a difference?

If it is taxable by the feds, I know it goes under other income and is subtracted from the AGI for the State taxes. That's how grants are treated.

Dan

Not A Product Question

V

Vanessa A

No, your state rebate is not taxable. Generally, money received from the state as a credit, grant, refund or rebate is not taxable.

The primary exception to this is if you claim an itemized deduction and then receive a refund of some of the taxes you claimed as a deduction on your itemized return or if you received additional interest on a refund from the government. In this case, the following year, you would need to claim the refund as income since you took a deduction for it. Otherwise, payments from the state are not taxed by the federal government or vice versa.

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