Up to a $5000 Federal Tax Credit per Qualified Dwelling Unit
The Section 45L Energy Efficient Home Credit, established by the Energy Policy Act of 2005, allows eligible developers to claim a tax credit for each dwelling unit. Single-family homebuilders and multifamily developers can benefit from the Section 45L Credit. The Inflation Reduction Act of 2022 extended the Section 45L Credit for homes sold or leased during 2022 with little modification. The Act provides new requirements and higher benefits for units sold or leased from January 1, 2023, through December 31, 2032.
REQUIREMENTS
Single Family Homes Benefits and Requirements
- $2,500 tax credit for single-family homes certified as ENERGY STAR Single Family New Homes Program Version 3.1. (For homes constructed before January 1, 2025, and Version 3.2 thereafter).
- $5,000 tax credit for single-family homes certified as DOE Zero Energy Ready Home (ZERH).
Manufactured Homes Benefits and Requirements
- $2,500 tax credit for manufactured homes certified as ENERGY STAR Manufactured Home National Program requirements.
- $5,000 tax credit for manufactured homes certified as DOE Zero Energy Ready Home (ZERH).
Multifamily Homes Benefits and Requirements
- $500 tax credit for multifamily homes constructed after 2020 and certified as ENERGY STAR Single Family New Homes Program. When constructed with prevailing wages, the credit increases to $2,500.
- $1,000 tax credit for multifamily homes certified as DOE Zero Energy Ready Home. When constructed with prevailing wages, the credit increases to $5,000.
SECTION 45L CREDIT SUMMARY
OUR SERVICE
Our Section 45L Tax Credit team includes HERS raters and tax professionals who will perform free assessments to prequalify your homes. Our study includes:
- Reviewing construction documents.
- Interviewing design professionals, project managers, and other relevant personnel.
- Performing necessary testing and inspections.
- Modeling energy efficiency using IRS-approved software.
- Preparing certificates of compliance signed under penalties of perjury by a HERS rater.
- Coordinating with your tax preparer.
- Providing free audit support.
SECTION 45L CREDIT FOR 2022 AND PRIOR
For residences leased or sold before 2022, single-family homebuilders and multifamily developers can benefit from the Section 45L Credit. The maximum credits per dwelling unit are:
- $2,000 per unit for a new energy-efficient home.
- $1,000 per unit for manufactured homes.
REQUIREMENTS
An eligible contractor must have constructed a qualified energy-efficient home, as well as owned and have had a basis in the home during its construction. Both new construction and renovations to existing residences are eligible when they meet the following qualifications:
- Certified to provide an annual level of heating and cooling energy consumption that is at least 50% below a comparable dwelling unit constructed in accordance with the standards of 2006 IECC.
- Improvements to the building envelope that provides at least one-fifth of the 50% reduction in energy consumption.
- Three stories above grade or less.
- Sold or leased as a residence (the credit can be taken retroactively for three years or to any open tax year).
The credit applies to single-family homes, apartment complexes, assisted living facilities, student housing, and condominiums. Each unit in a multifamily residential facility may qualify.
OUR CERTIFIED DELIVERABLES ARE ALL BACKED BY LEXICON’S AUDIT DEFENSE PROTECTION FREE OF ANY ADDITIONAL COST, MEMBERSHIP, OR COMMITMENT.
Getting in touch is easy!
We help U.S.-based businesses all around the country determine their Section 45L eligibility and will demonstrate why Lexicon is the foremost specialty firm for this government-sponsored federal tax incentive.
One of our Section 45L specialists will respond within twenty-four hours.