On Sept. 27, the Internal Revenue Service issued a notice providing guidance on the New Energy Efficient Home Credit found in Section 45L of the Internal Revenue Code.
The Inflation Reduction Act of 2022 amended Section 45L to provide eligible contractors with a tax credit for eligible new or substantially reconstructed homes that meet applicable Energy Star home program or U.S. Department of Energy Zero Energy Ready Home (ZERH) program requirements. The credit amount is contingent on which set of energy-saving requirements the home meets, and is $500, $1,000, $2,500, or $5,000.
The new Section 45L provisions include two tiers of credits, with the higher credits for eligible homes and dwelling units certified to applicable ZERH program requirements. The 45L tax credit is $5,000 for single-family and manufactured homes eligible to participate in the Energy Star Single Family New Homes Program or the Energy Star Manufactured New Homes Program, respectively, and which are certified to applicable ZERH program requirements.
For multifamily, the 45L tax credit is $1,000 for dwelling units that are part of a building eligible to participate in Energy Star's Multifamily New Construction Program and which are certified to applicable ZERH program requirements—unless the project meets prevailing wage requirements, in which case the tax credit is $5,000 per unit.
The amended 45L tax credit applies to qualified energy-efficient homes acquired after Dec. 31, 2022, and before Jan. 1, 2033, for use as a residence during the taxable year.
Advertisement
Related Stories
Energy Efficiency
EPA Launches Series of Webinars on Energy Star Program and 45L Tax Credit
The series of six webinars on the Energy Star program for single-family and multifamily new construction will take place over the next several weeks
Energy Efficiency
Introducing the Schneider Home energy management system
Turn your home from an energy sucker to an energy saver with technology that will make it sustainable, smart, and resilient. Schneider Home makes…
Construction
Lessons in Energy Efficiency and Sustainability From The New American Home
The 2023 show home offers an ultra-comfortable, healthy, and sustainable environment that's a model for energy and water efficiencies, regardless of price point