Summary

Extends a tax exclusion so certain government or utility rebates and subsidies for water conservation, storm water management, and residential wastewater measures are not counted as taxable income. The change applies to subsidies paid by public utilities, storm water management providers, or State/local governments for dwelling units (wastewater measures limited to a taxpayer’s main home) and applies to amounts received after December 31, 2021.

Key Points

• Certain water conservation, storm water, and residential wastewater subsidies are excluded from gross income for federal tax purposes.
• Exclusion applies to subsidies provided by public utilities, storm water management providers, or State/local governments.
• Wastewater management subsidies are excluded only for a taxpayer’s principal residence.
• Defines covered measures and providers, and clarifies that governments count as "persons" for these definitions.
• The change is retroactive to amounts received after December 31, 2021.
• Includes clerical updates to headings and the table of sections but does not create new programs or appropriations.
• Contains a non-substantive clause preserving that it does not decide tax treatment of subsidies received before 2022.

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