45L Credit

Energy Efficient Home Credit Claim

The 45L credit is available to eligible contractors for the construction or manufacture of energy efficient residential dwellings substantially completed before December 31, 2020. The credit is up to $2,000 per residential unit.

To secure the credit, a unit must be at least 50% more energy efficient than a similar unit constructed in accordance with the 2006 International Energy Conservation Code with 10% being derived from building envelope construction or improvements.

Contractors may claim up to a $2,000 credit per unit for residential housing units featuring at least a 50% energy reduction of similar units relative to the International Energy Conservation Code (IECC). To be eligible, the following criteria must be met:

 

  • The contractor must own the unit at the time of construction or improvement
  • The building can be no taller than 3 stories
  • Energy efficient features such as high R-value insulation, roofing, doors, windows and HVAC systems must be used
  • The unit must be in the United States
  • 10% of the energy efficiency must be derived from the building envelope
  • The credit must be certified and documented by a third-party licensed professional

FAQ

Who can complete a 45L claim?
Someone who has been accredited by the Residential Energy Service network (RESNET) or similar rating network must complete the analysis. The person cannot be affiliated with the contractor seeking the claim in any way. The process should include computer modeling and testing completed on-site as part of the submittal package.
Does the homeowner or unit owner receive the 45L credit?
A 45L Energy Efficient Home credit is available to the contractor who owned or had a basis in the unit at the time it was constructed or remodeled. If that person hires a 3rd party contractor, the 3rd party is not eligible, only the contractor who owns the unit is.

Timing

Although the credit is available for property substantially completed between August 8, 2005 and December 31, 2020, credits may only be taken on timely filed tax returns or on amended returns within the open three-year window for amendment.

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