An exclusion from gross income is allowed for vouchers, rebates or other financial incentives received from the California Energy Commission, the Public Utilities Commission or a local publicly-owned utility for the purchase and installation of specified energy production systems. 

For tax years beginning on or after July 1, 2015 (i.e., 2016 for calendar year individuals), CA allows an income exclusion for loan forgiveness, grant, credit, rebate, voucher or other financial incentive issued by the California Residential Mitigation Program or California Earthquake Authority to assist a residential property owner or occupant with expenses paid, or obligation incurred for earthquake loss mitigation (seismic retrofitting). An adjustment will need to be made on CA Schedule CA, Part I, Section B, line 8z (2024), for income of this type that was included on the federal return.

AB 2142, signed by the governor Sept. 28, 2022, excludes from CA gross income “any amount received from a turf replacement water conservation program in the form of a rebate, voucher or other financial incentive issued by a public water system, local government or state agency.” Applies for tax years 2022 through 2026. Taxpayers claiming this gross income exclusion should file FTB 4197, Information on Tax Expenditure Items.

For taxable years beginning on or after January 1, 2024, and before January 1, 2029, California law allows a qualified taxpayer an exclusion from gross income for any amount received as a California qualified wildfire loss mitigation payment through the California Wildfire Mitigation Financial Assistance Program. Use Schedule CA (540) Part I, Section B, line 8z to make adjustment if income was included on the federal return (R&TC Section 17138.8).