11 Ways the Government Pays You to Live Green

By Tim Lemke on 20 January 2016 0 comments

Do you care about the planet? Do you care about saving money? Those ideas are not mutually exclusive.

If you are environmentally conscious, it's worth knowing that you can "live green" and get help from the government to do so. Federal, state, and local governments offer tax breaks, credits, and straight cash payments to people who keep an eye on their carbon footprints.

There is plenty of help available, and it's worth checking with the IRS and your state and local governments to see where you can save. Here are 11 big ways that governments will pay you to live green.

1. Cash for Burning Biomass

Forget the oil burner or electric heat pump. You can get government money by using a biomass stove, which burns things like wood, plants, grass, and even corn. There's a federal tax credit of up to $300 for stoves that use biomass, and some states have additional credits. (Maryland, for example, will rebate up to $700 for a new pellet burning stove.)

2. Tax Breaks for Electric Cars

Electric and hybrid vehicles are cool, but they often have a higher price tag than regular automobiles. So the federal government wants to help out by offering a tax credit of up to $7,500. Take that into account the next time you're eyeing a Tesla, Toyota Prius, or Nissan Leaf.

3. Incentives to Use Alternative Energy

There are are all kinds of incentives for you to electrify your home using something other than fossil fuels. There's a 30% federal tax credit for installing a geothermal heat pump, wind turbines, or solar panels, for example. There are also grant programs at the state and local level. The idea is that these credits will offset at least some of the relatively high cost of installing these systems, thus making it easier financially for homeowners to go green.

4. Money for a Home Energy Audit

There are some local governments that will give you cash just for an examination of how you use energy in your home. In most cases, you will get recommendations on ways to use less energy, but you can get the tax credit even if you don't make any changes. Takoma Park, MD offers $100 just to get the audit done.

5. Money for Windows, Doors, and Skylights

Sometimes getting new windows isn't just about making your house look pretty. If they exceed EnergyStar requirements for efficiency, you can get a tax credit of up to $500 on the cost. Good windows and doors can help keep out drafts and help heating and cooling systems work more efficiently. This credit also applies to new insulation and your roof.

6. Cash Back on Appliances

The federal government used to give credits for energy-efficient refrigerators and the like, but that's been phased out. However, there still may be localities that offer similar incentives for EnergyStar rated appliances. (See also: 13 Small Kitchen Appliances That Aren't Worth the Money)

7. Public Transit Subsidies

The federal government and some state governments encourage employers to offer a pre-tax benefit for workers who use public transportation to commute. Under the federal tax break, workers can reduce their taxable income by as much as $255 per month. The federal benefit also works for parking, so it's not entirely a "green" incentive. Some states (including California) allow workers to "cash-out" the parking benefit if they bike, walk, or carpool to work.

8. Bike-to-Work Incentives

The IRS allows employers to reimburse workers for up to $20 a month for expenses related to biking to work.

9. Tax Incentives for Your Home Office

The federal and state government want to make it easier for you to work from home. Many expenses related to having a home office, including equipment, furniture, and some utilities, can be tax deductible. In 2013, the IRS announced a "simplified" deduction that allows for up to $5 per square foot of space used as a home office (up to 300 square feet.) To qualify, you must have a space that is used "exclusively" for work.

10. Tax Deductions for Supporting National Parks

The National Park Service operates 59 parks, most of which are known for their natural beauty and prized by conservationists. If you're the type of person who likes to camp, hike, and climb, your donation to the National Park Foundation is tax-deductible. Additionally, the Park Service will offer free admission to parks on 16 dates in 2016.

11. Cash for Reclaimed Water

In many states, businesses can reduce their taxable income by using reclaimed wastewater, or so-called "greywater." And homeowners in states including Arizona can get a tax deduction on equipment to allow for recycled water usage. "Greywater" is generally not good to drink, but can be used for toilets, crop irrigation, and other non-potable uses.

Have you taken advantage of any of these eco incentives?

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Area Man

Time to stop subsidizing electric vehicles, people that can afford a $90,000 Tesla, don't need my tax money to help them enjoy the ride. Electrics and hybrids have a good track record, but if they can't appeal to consumers without incentives, too bad. They need to be competetive with gasoline powered vehicles.