45L Energy Efficient Home Credit

A $2,000 Federal Tax Credit per Qualified Dwelling Unit

45L Energy Efficient Home Tax Credit

Up to $5,000 Federal Tax Credit per Qualified Dwelling Unit

§45L ENERGY EFFICIENT HOME CREDIT

The §45L Energy Efficient Home Credit, as established by the Energy Policy Act of 2005, allows eligible developers to claim a tax credit for each dwelling unit. Both single family homebuilders and multifamily developers can benefit from the §45L Credit. The Inflation Reduction Act of 2022 extended the §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.
» Learn about the §45L Credit for 2022 and prior.

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 wage, the credit increases to $2,500.
  • $1,000 tax credit for multifamily homes certified as DOE Zero Energy Ready Home. When constructed with prevailing wage, the credit increases to $5,000.

§45L Credit Summary

Home
Type
Qualification
Requirement
Prevailing Wage
Requirement
2023
Credit
2021
Credit
Single Family* EnergyStar No $2,500 $2,000
Single Family* ZERH No $5,000 N/A
Manufactured Home EnergyStar No $2,500 $1,000
Manufactured Home ZERH No $5,000 N/A
Multifamily EnergyStar No $500 $2,000
Multifamily ZERH No $1,000 N/A
Multifamily EnergyStar Yes $2,500 N/A
Multifamily ZERH Yes $5,000 N/A

*Single Family includes site-built and modular single family homes, duplexes and townhomes.

OUR SERVICE

Our §45L 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.

§45L CREDIT FOR 2022 AND PRIOR

For residences leased or sold prior 2022, single family homebuilders and multifamily developers can benefit from the §45L Credit. The maximum credits per dwelling unit are:

  • $2,000 per unit for 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 in height.
  • Sold or leased as a residence (the credit can be taken retroactively for three years back or to any open tax year).

The credit applies to single-family homes as well as apartment complexes, assisted living facilities, student housing and condominiums. Each unit in a multifamily residential facility may qualify.

CASE STUDY

Each unit in a newly constructed apartment community qualified for the $2,000 per unit §45L Credit. With 220 units, the developer received a total tax credit of $500,000.

PROPOSAL REQUEST