How to Get Rebates for Home Improvements

Home improvement rebates offer a partial refund on the cost of a new appliance or system upgrade after the purchase is complete. These financial incentives encourage homeowners to invest in improvements that enhance energy efficiency or promote water conservation. By lowering the net cost of these upgrades, rebate programs make it more affordable for individuals to adopt newer, more sustainable technologies and reduce their long-term utility expenses.

Differentiating Rebates from Tax Credits

While both rebates and tax credits reduce the cost of home improvements, they function differently. A rebate is a direct cash-back incentive you receive after purchasing a qualifying item. This payment, often a check or prepaid debit card, lowers the actual out-of-pocket expense for the improvement and occurs separately from your annual tax filing.

A tax credit is a dollar-for-dollar reduction of your income tax liability. The amount is subtracted directly from the total federal tax you owe for the year. For example, a $500 rebate on a new heat pump means you receive a $500 payment after the purchase. In contrast, a $500 tax credit for the same heat pump reduces your tax bill by $500; if you owed $2,000 in taxes, you would now owe $1,500.

Rebates are managed by manufacturers, utility companies, or state energy offices, while federal tax credits are claimed on your tax return with the IRS using forms like Form 5695. Some programs may allow you to combine a rebate with a tax credit for the same purchase, maximizing your total savings.

Sources of Home Improvement Rebates

Federal Government Programs

The federal government, through the Inflation Reduction Act, has funded two key home energy rebate programs: the Home Electrification and Appliance Rebates (HEAR) and the Home Efficiency Rebates (HOMES) program. While federally funded, these programs are administered by each state’s energy office.

As of mid-2025, most states are still developing their specific programs, with many projected to launch in late 2025 or 2026. Because timelines vary, it is important to check with your state’s energy office for the most current information on program status.

The HEAR program provides point-of-sale rebates for low- and moderate-income households to purchase electric appliances, with savings up to $14,000. The HOMES program provides rebates based on the overall energy savings achieved through a whole-house retrofit, with amounts scaling based on the demonstrated reduction in energy use.

State and Local Governments

Many state and municipal governments offer their own rebate programs tailored to regional priorities, such as water conservation or storm resilience. These programs exist independently of or in conjunction with federal initiatives. Common rebates may be available for:

• Installing water-saving landscaping (xeriscaping)
• Purchasing high-efficiency irrigation controllers
• Adding or upgrading insulation in attics, walls, and crawl spaces
• Installing high-performance windows and doors
• Setting up rainwater harvesting systems

These programs are highly localized, so homeowners should check their state energy office or municipal government websites for details.

Utility Companies

Electric, gas, and water utilities are a common source for home improvement rebates, offering incentives to reduce overall demand on their systems. Rebates are frequently available for purchasing ENERGY STAR certified appliances, which meet strict efficiency guidelines set by the U.S. Environmental Protection Agency, including refrigerators, clothes washers, and dishwashers.

Utilities also provide incentives for HVAC system upgrades and maintenance, such as rebates for installing new, high-efficiency central air conditioners, furnaces, or heat pumps. Some offer smaller rebates for an annual HVAC tune-up or for installing a smart thermostat. The ENERGY STAR Rebate Finder is an online tool that helps consumers search for utility rebates available in their zip code.

Product Manufacturers

Manufacturers of appliances and building materials frequently offer their own rebates to encourage sales of their products. These incentives are a marketing tool, are often available for a limited time, and can be found for items like windows, roofing materials, and water heaters. A primary advantage is that manufacturer rebates can often be combined with other incentives from utilities or government programs, allowing you to “stack” savings on a single purchase.

Required Information and Documentation for Applications

Successfully obtaining a rebate hinges on providing precise documentation. Each program has specific requirements, but several documents are almost universally needed. The most important document is the proof of purchase, which must be a dated sales receipt or a final paid invoice that clearly itemizes the products purchased and shows the retailer’s name, purchase date, and total amount paid.

You will also need to provide specific details about the product itself, including the manufacturer, full model number, and serial number. This information is found on the appliance, its packaging, or the owner’s manual. It is a good practice to photograph the model and serial number plate on the unit before it is installed, as it may be difficult to access later.

If the rebate requires professional installation, you must provide a dated invoice from the licensed contractor who performed the work. For energy-related rebates, proof of efficiency certification is often required. This may involve submitting a photo of the ENERGY STAR logo on the product or providing a certification number from a body like the National Fenestration Rating Council (NFRC) for windows.

Finally, you will need the official application form from the program sponsor’s website. Carefully complete all fields on the form, ensuring that the model numbers and purchase dates you enter exactly match what is printed on your receipts and invoices to avoid processing delays.

The Rebate Application Process

Once you have gathered all required documentation, the next step is submission. Many rebate programs use online portals where you can fill out the application electronically and upload digital copies of your invoices and other documents. This is often the fastest and most efficient method.

For programs that still use mail-in submissions, print the completed form and make copies of all your receipts and documents to include in the package. It is recommended to send the application via certified mail with a return receipt requested. This provides proof that you mailed the application and confirmation that it was received.

After submitting your application, you should receive a confirmation with a reference number to track its status. Processing timelines can range from six to eight weeks. The final rebate is usually delivered as a physical check, a prepaid debit card, or, in the case of utility rebates, a credit applied directly to your monthly bill.

Tax Treatment of Received Rebates

The tax implications of a home improvement rebate are generally favorable. According to the IRS, a rebate is not considered taxable income. Instead, it is treated as a reduction in the purchase price of the asset, which lowers your cost basis in the improved property. For example, if you buy a furnace for $5,000 and receive a $400 rebate, your cost basis in the furnace becomes $4,600.

This adjusted basis is important if you sell your home, as the cost of improvements is added to the home’s original purchase price to calculate the total capital gain. This treatment applies to most rebates from manufacturers, utilities, and government programs. If you also claim a federal tax credit for the same improvement, you must reduce the qualified expense by the rebate amount before calculating the credit.