Are whole house generators tax deductible? A lot of consumers are asking this question these days, and the answer is that they are not.
You cannot claim a whole house generator as a tax deduction because it does not increase the value of your home. If you want to claim it as a medical expense, you will need proof of the health conditions that require the generator.
Medical Equipment Deduction
If your home has an emergency generator for medical equipment such as oxygen machines, dialysis equipment, cpap machines and chair lifts you can include the cost of a generator in your taxes as a medical expense. In order to get this deduction you must provide proof that the person who needs this medical equipment has a condition that requires power round the clock.
The Medical Equipment Deduction is similar to a tax credit, in that you can claim the cost of special equipment as an itemized deduction on Schedule A of your taxes. You will have to attach a letter from your doctor stating that this equipment is necessary for you or a loved one.
The main difference between the Medical Equipment Deduction and a tax credit is that a credit may be subtracted from your income rather than written off, as is the case with a medical equipment deduction. In addition to this, a credit may reduce the capital gains tax you pay when you sell your house.
Capital Gains Tax Credit
When selling a home, you may need to pay tax on the profit made from it. This is known as capital gains tax.
The Capital Gains Tax Credit is another way to offset the tax you will owe when you sell your property. It is available to homeowners and can be worth as much as 150% of your investment.
In order to qualify for the tax credit, you must have made “a major improvement to the property.” For example, if you install a new roof or a new furnace, this is considered a capital improvement.
If you have a generator installed in your house, this may be treated as a major improvement by the IRS. You’ll want to consult with a real estate professional to determine how the generator adds value to your home and whether it qualifies as a capital improvement.
Alternatively, you may be eligible for a tax credit under the Self Generation Incentive Program (SGIP). This program offers up to 30% of your backup power system costs as a tax credit if it uses renewable energy like solar.
Energy Tax Credit
The Energy Tax Credit is a tax incentive that encourages households to make upgrades in their homes that reduce energy consumption and pollution. The credit can be up to 30 percent of the cost of installing a clean energy system in the home, such as solar panels, wind turbines, battery storage and more.
Currently, there are two major clean energy tax credits that homeowners can take advantage of. The first is the Residential Energy Efficient Property Credit (REEPC), which is available to homeowners who install renewable energy systems in their principal residences.
The second is the Nonbusiness Energy Property Credit, which was extended through 2032 and renamed the Energy Efficient Home Improvement Credit (EEHIC). The credit can be used toward investments in certain energy efficient home improvements, such as exterior windows, doors, skylights and building envelope components.
FEMA Reimbursement
If you live in a hurricane or other disaster area, you might be eligible for FEMA Reimbursement to help pay for your losses. This money is provided to people whose homes were destroyed or damaged in a disaster, and they can use the funds for things like food, clothing, gasoline, medical expenses, transportation costs, and more.
The reimbursement process begins when a state governor declares a major disaster. As of September 7, parts of three states have received that declaration, including Louisiana.
You can be reimbursed up to $800 for a generator, according to FEMA spokesman John Mills. However, you must have purchased it on August 26 or later, and it must be necessary to power medical equipment.
It’s also important to note that FEMA cannot provide reimbursement for items purchased under homeowners insurance or flood coverage because those types of benefits are subject to a rule known as “duplication of benefits.”