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IRS: Builders of qualified new energy efficient homes might qualify for an expanded tax credit under Section 45L
08/25/2023
[ Article originally appeared in www.irs.gov ]
The Internal Revenue Service reminds eligible contractors who build or substantially reconstruct qualified new energy efficient homes that they might qualify for a tax credit up to $5,000 per home. The actual amount of the credit depends on eligibility requirements such as the type of home, the home's energy efficiency and the date when someone buys or leases the home. This important credit was expanded as part of the Inflation Reduction Act of 2022. Eligibility for builders and homesTo qualify, eligible contractors must construct or substantially reconstruct a qualified new energy efficient home. They also must own the home and have a basis in it during the construction, and they must sell or lease the home to a person for use as a residence. The homes must also be specified categories of single-family (including manufactured) or multifamily homes under Energy Star programs, be located in the United States, and meet applicable energy saving requirements based on home type and acquisition date. Requirements and credit amounts for 2023 and afterFor homes acquired in 2023 through 2032, the credit amount ranges from $500 to $5,000, depending on the standards met, which include:
Requirements and credit amounts before 2023For homes acquired before 2023, the credit amount is $1,000 or $2,000, depending on the standards met, which include:
Properly claiming the creditEligible contractors must meet all requirements under Internal Revenue Code Section 45L prior to claiming the credit. Guidance interpreting Section 45L may be found in Notice 2008-35 (and Notice 2008-36, for manufactured homes). Use Form 8908, Energy Efficient Home Credit, to claim the Section 45L credit.
The IRS encourages eligible contractors to practice good recordkeeping of all documents required to support a claim for the Section 45L credit. Back To News |
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