The Alliance for Water Efficiency has been working hard, along with a number of other organizations, to get an amendment to the tax code to make water conservation rebates exempt from federal income tax. On Friday, December 11, 2015, a letter signed by 32 Congressional Representatives asking for this amendment was sent to the IRS and the Department of the Treasury. Click here for a copy of the letter.
Click here for IRS and the Treasury Department's Jan 5, 2016 Letter of Response [PDF]
Urgent, Act Now! Tell Congress to Make Water Conservation Rebates Tax-Exempt
We need AWE members and supporters to act right now in urging congressional leaders to change federal tax law so that rebates and credits for water conservation and green infrastructure projects remain tax-free for recipients.
AWE is part of an ad-hoc coalition of water conservation groups and water-supply entities seeking such a change, and there is recent progress toward including it in the massive bill to fund government programs for the coming year. Changing the tax treatment of water conservation rebates would give them the same treatment that energy rebates receive under the tax code.
But we need your support for this important issue. Please e-mail Speaker of the House Paul Ryan, Minority Leader Nancy Pelosi and Majority Leader Kevin McCarthy urging them to support this change. You can find their e-mail addresses and a proposed letter of support here.
Please don’t wait. There are only a couple of weeks left before Congress adjourns for the year and this opportunity is lost.
AWE Seeks Tax-Exempt Status for Water Conservation Rebates
The Alliance for Water Efficiency is urging a change in federal tax law so that rebates and credits for water conservation and green infrastructure projects remain tax-free for recipients.
In response to urging from key lawmakers, AWE has suggested that these payments from water utilities not be included in gross income by the Internal Revenue Service—the same treatment as energy rebates receive under the tax code.
Because water rebates and credits are now considered “income” by the IRS, utilities are required to send a Form 1099 (Miscellaneous Income) to any customer who receives more than $600 in rebates for a calendar year. That form, which is also sent to the IRS, could result in a tax liability for the homeowner or business that took action to conserve water usage or curtail storm water runoff—a potential disincentive for people to help improve water efficiency. And those rebates can reach tens of thousands of dollars when a homeowner has torn up extensive lawn and landscaping to save on water use.
This issue was included in the U.S. Treasury Department’s so-called “greenbook,” an annual report on tax policy changes the administration would like Congress to enact. It is also the goal of legislation that is being considered by Rep. Jared Huffman, D-CA.
AWE is working with members of the tax-writing House Ways and Means Committee and Senate Finance Committee on ways that this important change in the tax law can be made. We’ll keep you posted on progress.