State Rebate 1099: Taxable Income?

[Psychstache]

Calling all the tax gurus.

In mid 2022, I bought an electric car. My state has a rebate program for electric vehicle purchases and sent me a $2500 rebate check after my purchase. Today, I got a 1099-MISC in the mail from the department that runs the rebate program with other income of $2500 indicated.

I know the rule is all income is taxable unless it is not, but rebates CAN be nontaxable:

"Cash rebates. A cash rebate you receive from a dealer or manufacturer of an item you buy isn't income, but you must reduce your basis by the amount of the rebate."

My hitch is the provider. The IRS rules appear silent on state gov rebates. Anyone have any thoughts/references?

[nalor511]

Rebates that require you to spend money are generally not taxable. You'd add the income in your tax software then add a negative entry for the same amount, "non taxable purchase rebate 1099misc"

[Psychstache]

Rebates that require you to spend money are generally not taxable. You'd add the income in your tax software then add a negative entry for the same amount, "non taxable purchase rebate 1099misc"

So I think I did this, and is plugged the information into a form titled "Schedule 1Line 8z - Other Income". I put in a $2500 entry with the info from the 1099, and then right below it is an entry for -$2500 saying nontaxable purchase rebate, which zeroed out the amount on the 1040. Does that seem correct?

[MDM]

Has the state obtained an IRS ruling or is in any way advising on the taxability of the payment?

[Psychstache]

Has the state obtained an IRS ruling or is in any way advising on the taxability of the payment?

Not sure. It's an old grant program from Texas that is on the way out (LDPLIP grant). I would guess (given the intensely slow communication and award of the rebate when I applied) that they are minimally staffed. I will send in an email and see what they got.