Blog: Dermot Cole
Alaska energy rebate and federal taxes
Published Tuesday, March 31, 2009
With tax time at hand, there's a new wrinkle in the discussion about the tax rebates for energy efficiency that have to be reported as taxable income to the IRS.
The Alaska Housing Finance Corporation, which is administering the rebate program, has distributed 1099 forms. I've talked to several local accountants who believe the rebates must be reported as income.
The new development comes in the form of an IRS memo dated Feb. 20. It says that payments from a state to low and moderate-income taxpayers to help fund new furnaces and boilers are not counted as taxable income.
The key difference is that the Alaska energy rebate program is for people of all incomes, while the program in the IRS memo has income limits.
The income issue may be enough to end all discussion, but still, AHFC should investigate to see if there is any way of structuring the program so that the payments for energy improvements are not treated as taxable income.
The state should seek a determination from the AHFC as to whether the effort to fund energy improvements could be treated as nontaxable, as programs funded by utilities are.
As it stands now, about $30 million of the $160 million in the program may go to taxes and not to energy improvements. AHFC officials said they will check, but I haven't heard anything back yet.
Here is the IRS memo issued last month. It is worth some discussion: http://www.irs.gov/pub/irs-wd/0908025.pdf
By IRS rules, it would also be good to know what qualifies as low or moderate income.
Too bad I already filed taxes and paid taxes on our rebates.
The old way of tax credits for energy conservation was much better.
Fbksmom, you can file an amended return if you need to make changes.
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