Not only can you reduce carbon emissions by opting for energy efficiency in homes, but you can also earn substantial savings with the 45L Energy Efficient Home tax credit.
Energy efficiency benefits homeowners by lessening their energy costs, reducing their carbon footprint and modernizing their homes. Additionally, the practice also helps home builders in the form of lucrative tax incentives.
Both new construction and remodeling projects can qualify for the $2,000 per unit tax perks that 45L provides. For buildings such as apartment buildings, townhouses, condominiums and assisted living facilities, the savings for builders and contractors can multiply significantly because each unit counts as its own credit.
How does eligibility for the 45L tax credit work?
The 45L federal tax credit is available to developers, individuals, owners and contractors who build homes. Projects can include single-family homes, apartment complexes up to three stories high, and homes in multi-dwelling buildings.
All construction or remodel projects must reduce energy use by at least 50% to claim the 45L tax credit. Installations built or reconstructed from August 5, 2005 to December 31, 2020 are applicable.
If you have not built projects in the last tax year, you can still qualify for 45L. The tax credit can be retroactively claimed for residential and apartment projects worked on in the last three years, and any unused credit can be claimed for up to the next 20 years.
What kinds of upgrades would qualify me?
Some of the materials that can be leveraged for 45L tax credit are as follows:
- Hurricane impact windows, double-pane or triple-pane window glass to offer loss of cool air conditioning
- Reflective roofing materials to prevent loss of heat
- Exterior doors with extra insulation to help regulate temperature
- Air conditioning with SEER ratings of 13+
- Gas furnace systems with an 80+ percent efficiency rating
- Vinyl windows that are rated Low E
- Solar energy features
What is the first step to claiming my deductions?
To get started on your tax credits, you will need to contact our tax experts to assess whether your projects qualify for the 45L program. Call our staff at (561) 257-3436 to claim your free analysis.