What is a Tax Credit?
A tax credit reduces the tax you pay, dollar-for-dollar.  You don’t receive an income tax credit when you buy the product, like an instant rebate. You claim the credit on your federal income tax form at the end of the year. The credit then increases the tax refund you receive or decreases the amount you have to pay.

Tax Credits vs. Tax Deductions:
In general, a tax credit is more valuable than a similar tax deduction. A tax credit reduces the tax you pay, dollar-for-dollar. Tax deductions – such as those for home mortgages and charitable giving – lower your taxable income. If you are in the highest 35-percent tax bracket, the income tax you pay is reduced by 35 percent of the value of a tax deduction. But a tax credit reduces your federal income tax by 100 percent of the amount of the credit.

What is a Rebate?
A rebate is the return of a portion of a purchase price by a seller to a buyer, usually on purchase of a specified quantity, or value, of goods within a specified period. Unlike a discount (which is deducted in advance of payment), a rebate is given after the payment of the full invoice amount.

**Please note: We at Sustainable Improvements are experts on energy efficiency, not taxes, and we do not provide tax advice; you may want to consult a tax professional.**