New Bill Proposes 30% Tax Credit for Home Food Waste Recycling Gear & Services, Capped Annually

This new bill, the "Local Food Recycling and Regenerative Opportunities Act," aims to put some money back in your pocket if you're looking to tackle food waste at home. It proposes a federal tax credit by adding Section 25F to the Internal Revenue Code of 1986 for folks who buy qualified residential food recycling appliances or sign up for organic waste collection services. The idea is to give you a financial nudge to keep food scraps out of landfills.

Getting Credit for Going Green (At Home)

So, what's the deal? If this bill becomes reality, starting with expenses incurred after December 31, 2025 (meaning for your 2026 taxes), you could claim a tax credit equal to 30% of what you spend on certain food waste diversion efforts. This covers two main things: purchasing a "qualified residential food recycling appliance" – think those countertop electric composters or other gadgets that separate and pre-process food scraps – and paying for "qualified residential organic waste services," which are essentially curbside or drop-off services that collect your food waste for local composting or other landfill diversion methods. The goal here is pretty straightforward: make it a bit cheaper for individuals to manage their kitchen waste more sustainably.

The Fine Print on Your Food Waste Bucks

Now, before you envision a major tax windfall, there are some important caps and definitions. For the appliances, the credit is maxed at $300 per appliance, per taxpayer, each taxable year. So, if you buy a fancy $1,000 machine, you'd get a $300 credit, not 30% of the full $1,000. For the waste collection services, the total credit you can claim for all such services in a year is capped at $120. The bill is also clear that you can't double-dip; as stated in Section 25F(d), if you claim this credit for an expense, you can't also take another deduction or credit for that same cost. Plus, the property's basis (its value for tax purposes) gets reduced by the amount of the credit. A "qualified residential food recycling appliance" is specifically defined as an electric appliance you install and use in your main U.S. residence that separates food waste from other trash and pre-processes it for landfill diversion. A "qualified residential organic waste service" is a service that collects locally generated organic waste, including that pre-processed food, from your main U.S. home for local management and diversion from landfills.

Mark Your Calendars: When This Starts (and Stops)

This tax credit isn't designed to be around forever. It's slated to kick in for taxable years beginning after December 31, 2025. So, any qualifying purchases or service payments you make from January 1, 2026, onwards could be eligible. However, the program has an expiration date: the credit won't be available for appliances placed in service or services acquired after December 31, 2031. This provides about a six-year window for individuals to potentially benefit from these incentives and for manufacturers and service providers in this space to see increased interest.