45L

Mar 18, 2026

The IRS has recently introduced Form 7220, Prevailing Wage and Apprenticeship (PWA) Verification and Corrections, to report compliance with PWA requirements for claiming increased tax credits or deductions. This form is important because it verifies adherence to PWA rules, enabling taxpayers to access significantly boosted incentives, such as the fivefold increase in the §179D deduction or the full 30% §48E credit on projects over 1MW, potentially adding millions in tax savings for qualifying projects....

Mar 6, 2026

The One Big Beautiful Bill Act (OBBBA), enacted July 4, 2025, significantly reshapes real estate tax planning by accelerating deductions while narrowing energy incentives. The Act permanently restores 100% bonus depreciation under §168(k), allowing immediate expensing of qualified property, including assets identified through cost segregation studies. New §168(n) enables full expensing of qualifying portions of newly constructed nonresidential buildings used in manufacturing and production, creating major benefits for industrial and logistics projects. OBBBA also permanently restructures the Opportunity Zone program with rolling 10‑year designation cycles and enhanced rural incentives, including a 30% basis step‑up through Qualified Rural Opportunity Funds. §179 expensing limits increase to $2.5 million, further supporting capital investment. At the same time, OBBBA accelerates the sunset of key energy credits, making careful timing and proactive planning between 2025 and 2031 essential to maximize tax benefits and after‑tax cash flow....

Oct 10, 2025

The Inflation Reduction Act of 2022 introduced powerful energy-related tax incentives under Sections 179D, 45L, and 48E of the Internal Revenue Code. These provisions provide additional rewards for projects that meet prevailing wage and, in some instances, apprenticeship requirements. They offer substantial financial benefits for energy-efficient construction, multifamily residential development, and renewable energy installations....

Jul 17, 2025

The §45L Energy Efficient Home Credit is set to expire for homes sold or leased after June 30, 2026, as mandated by the One Big Beautiful Bill Act of 2025. To qualify, units must be certified and sold or leased by that date. Current credit amounts include $2,500 per unit for single-family homes certified as ENERGY STAR, and $5,000 per unit for those certified under the DOE Zero Energy Ready Home (ZERH) program. Manufactured homes meeting ENERGY STAR or ZERH standards qualify for the same respective credit amounts. For multifamily buildings built after 2020, the credit is $500 per ENERGY STAR-certified unit, or $2,500 per unit if prevailing wage requirements are met. ZERH-certified multifamily units are eligible for $1,000 each, or $5,000 per unit with prevailing wage. For homes sold or leased prior to 2020, the credit amounts are $2,000 per unit for new energy-efficient homes and $1,000 per unit for manufactured homes. With the expiration date approaching, developers should act now to secure these valuable credits....

May 14, 2025

The §45L Tax Credit and EnergyStar are currently intertwined. Losing one jeopardizes the other, significantly impacting our ability to build energy-efficient homes. The §45L credit is crucial for our industry's financial viability and environmental progress. Losing EnergyStar would severely hinder our ability to build sustainable housing. The §45L Tax Credit is our country’s last remaining federal incentive for residential builders....

Sep 28, 2023

On September 27, 2023, the IRS released guidance on §45L New Energy Efficient Home Credit (§45L Credit) through Notice 2023-65. The guidance provided in this notice addresses: (i) the person that is eligible for the credit, (ii) determining the applicable amount of the credit, (iii) energy saving requirements, (iv) certification requirements, and (v) substantiation requirements....

Aug 16, 2022

President Biden signed Into Law H.R. 5376, The Inflation Reduction Act of 2022. The Act extended the 45L credit for homes sold or leased during 2022 with little modification. Thus, residences sold or leased in 2022 would qualify for the 45L credit using the 2021 energy efficiency standards. However, from January 1, 2023 through December 31, 2032, the Act significantly changes the 45L Energy Efficient Home Credit with new provisions and requirements. ...

May 4, 2022

The new smaller version of the proposed Build Back Better legislation includes details that will extend and limit the 45L tax credit to Energy Star and Zero Energy Ready homes. The U.S. House Select Committee on the Climate Crisis met on April 7th and heard testimony from the American Public Gas Association, the Alliance to Save Energy, and the...