45L Energy Efficient Home Credit

Contractors, Builders & Property Owners

construction workerContractors and builders of energy efficient apartments and homes are able to reward their efforts by obtaining 45L Energy Efficient Home Credits. 45L is a lucrative tax incentive for the construction or renovation of single-family homes and low-rise residential buildings that have reduced its energy consumption by 50%.

45L allows qualifying builders and contractors to collect up to $2,000 for each unit of property that meets the certified energy efficient standards.

Eligible contractors and builders must own and have a basis in the qualified energy efficient home during its construction.

Eligible contractors / builders are defined by the IRS as

  • Individuals
  • A trust
  • An estate
  • A partnership
  • An association
  • A company
  • A corporation

In order to receive the benefits, builders and contractors must apply and document their installments before the construction crew breaks ground.

Qualifying project characteristics

  • Project must be three stories or less above ground (not including below-grade parking)
  • Project must be built on the territory of the United States
  • Project must meet construction standards based on those set by the 2006 International Energy Conservation Code (IECC)
  • Project must be completed between August 8, 2005, and December 31, 2020
  • Construction can include “substantial” rehabilitation and reconstruction

Energy efficient features include

  • Wall insulation R-13+
  • Roof insulation R-38+
  • Foundations and slabs with extra insulation
  • Vinyl low thermal emissivity windows
  • Double or triple pane windows
  • Insulated exterior doors
  • Reflective roofing materials
  • Air conditioning with SEER (Seasonal Energy Efficiency Rating) of 13+
  • Gas furnaces with at least 80 percent efficiency, or radiant heating system

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