Offset the costs of building
energy-efficient properties with 45L tax credits.

45L Tax Credit

The 45L Tax Credit offers up to $5,000 per eligible home for builders and developers who meet specific energy efficiency standards. It’s a powerful federal incentive designed to reward sustainable construction and boost your bottom line.

What Is the 45L Tax Credit?

The 45L Tax Credit is a federal incentive that provides up to $5,000 per qualifying energy-efficient dwelling unit to eligible homebuilders and developers. It’s designed to encourage the construction of residential buildings that meet or exceed specific energy-saving standards set by the Inflation Reduction Act and the Energy Star or Zero Energy Ready Home (ZERH) programs.

This credit applies to newly constructed or substantially renovated homes, including single-family residences, townhomes, apartments, and condominiums, that are leased or sold as primary residences. To qualify, properties must be certified by a qualified third party to meet the required energy efficiency thresholds.

The 45L credit can offer significant tax savings for builders committed to sustainable, energy-efficient design, and it's available retroactively in many cases.

Requirements to Claim the 45L Energy Credit

To qualify for the 45L Energy Credit, builders must meet several IRS-defined standards related to energy efficiency and construction. Here's what you need to know:

  • Eligible properties: Must be new or substantially renovated residential units in the U.S.
  • Who can claim: The builder or developer, not the homeowner or tenant.
  • Placed-in-service requirement: The Unit must be placed in service in the year the credit is claimed.
  • Third-party certification: Must be done by a qualified HERS rater or energy professional.
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Section 45L Credit Summary

HOME TYPE REQUIREMENTS PREVAILING WAGES 2023 & BEYOND
Single Family Energy Star No $2,500
ZERH No $5,000
Manufactured Home Energy Star No $2,500
ZERH No $5,000
Mutlifamily Energy Star No $500
ZERH No $1,000
Mutlifamily Energy Star Yes $2,500
ZERH Yes $5,000

How Does the 45L Tax Credit Work?

The 45L Tax Credit rewards builders and developers for constructing energy-efficient residential homes and apartments. For each qualifying unit that meets energy-saving standards, a fixed dollar credit is applied against the builder’s federal tax liability.

This credit directly reduces the amount of tax owed, providing substantial savings that encourage sustainable building practices.

To claim the credit, eligible builders must:

  • Ensure each home meets the required energy efficiency certifications.
  • Maintain proper documentation and third-party certification.
  • File the credit on their annual tax return for the year the home is placed in service.

This tax credit incentivizes greener construction by turning energy efficiency investments into real financial benefits.

Benefits of the 45L Energy Efficient Tax Credit

The 45L Energy Efficient Tax Credit offers significant advantages for builders and developers who invest in energy-saving construction. Key benefits include:

  • Direct Tax Savings: Reduce your federal tax liability dollar-for-dollar for each qualifying residential unit.
  • Improved Cash Flow: Lower taxes free up capital that can be reinvested into future projects or business growth.
  • Encourages Sustainable Building: Supports environmentally friendly construction practices, helping you meet green building standards.
  • Competitive Edge: Boost your market appeal by offering energy-efficient homes, which are in growing demand among buyers.
  • Long-Term Value: Energy-efficient homes often have lower utility costs and higher resale value, benefiting homeowners and enhancing your reputation.

By leveraging the 45L credit, you not only save money but also promote sustainability and innovation in residential construction.

Why Choose Our Energy Credit Consulting Services?

Claiming the 45L Tax Credit can be complex — that’s where we come in. Our experienced team simplifies the process, ensures compliance, and helps you maximize your credit potential.

Here’s why builders, developers, and contractors trust us:

  • Expert Guidance: We stay up to date with IRS rules and energy code changes so you don’t have to.
  • Detailed Project Analysis: We review each project to ensure it meets the 45L tax credit requirements.
  • HERS Rater Coordination: We connect with certified professionals to handle the required energy certifications.
  • Full-Service Support: From documentation to filing, we manage the entire process for you.
  • Maximized Savings: We work to identify all eligible units and ensure you claim the full credit available to you.

Let our energy credit consultants handle the details, so you can focus on building.

Ready to Claim Your 45L Tax Credit?

Qualify for valuable tax savings on energy-efficient homes. Contact us today — we’ll handle the details and maximize your credit.

Frequently Asked Questions

What is the 45L Tax Credit, and who qualifies?

The 45L Tax Credit is a federal incentive that offers up to $5,000 per eligible energy-efficient residential unit. It’s available to builders and developers—not homeowners—who construct or substantially renovate homes that meet energy-saving standards.

What are the 45L tax credit requirements?

To qualify, the property must be a new or significantly renovated residential unit in the U.S., meet specific energy efficiency standards (Energy Star or ZERH), be certified by a qualified third party (e.g., a HERS rater), and be placed in service in the year the credit is claimed.

What types of properties are eligible for the 45L energy credit?

Eligible properties include single-family homes, townhomes, apartments, and condominiums that are either sold or leased as primary residences.

How do I claim the federal 45L tax credit?

Builders must obtain proper third-party certification for each qualifying unit and file IRS Form 8908 with their annual tax return for the year the home was placed in service.

Can I claim the 45L tax credit retroactively?

Yes, in many cases, the credit can be claimed retroactively for properties placed in service in previous tax years, provided you have the required documentation and certification.

How long is the 45L tax credit available?

The 45L Tax Credit was extended under the Inflation Reduction Act and is currently available through 2032, with updated requirements and increased credit amounts.

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