45l Energy Efficient Home Credit
The 45L Tax Credit is available to single-family and multi-family builders as well as manufactured home producers for exceeding certain energy standards.
For years prior to 2023, the credit is $2,000 per dwelling unit to be claimed in the tax year each unit is first sold or leased. The credit can be claimed for newly constructed and substantially renovated homes and apartments as well as manufactured homes. We are able to certify units up to three years prior to the filing date for each year by amending tax returns. (Some exceptions apply, and certain parameters must be met).
For 2023, the credit and the requirements for it have changed. The Inflation Reduction Act of 2022 extended the credit through 2032. Beginning January 1, 2023 the new structure and requirements are as follows:
- For qualified single family and manufactured homes first acquired for use as a residence in 2023, the credit jumps to:
- $2,500 with Energy Star becoming the new base qualification standard
- $5,000 with Zero Energy Ready Home qualification
- For qualified multifamily units first acquired for use as a residence in 2023, the credit is:
- $500 per unit with Energy Star base qualification, potentially up to $2,500 if the taxpayer meets the additional prevailing wage requirement
- $1,000 per unit with Zero Energy Ready qualification, potentially up to $5,000 with the prevailing wage requirement
- Low Income Housing Tax Credit (LIHTC) properties no longer must reduce their adjusted basis under Section 42. This has been a major issue for LIHTC developers, requiring excess basis in the property to take advantage of 45L. LIHTC properties become a huge 45L opportunity area starting in 2023.
Claiming the credit for years prior to 2023 as well as 2023 and beyond requires energy modeling, inspections, and certification from an eligible certifier .
45L - FAQs
Construction companies can collect tax credits going back three years of homes built through the 45L program. The deadline to file depends on when the builder filed their taxes for that year.
For example, in our current year 2025, a builder can collect the 45L tax credits for homes built in 2021 up until the date (in 2025) that they filed their 2021 taxes in 2022. So if the builder filed for an extension in 2022 for their 2021 taxes and filed on 10/15/2022, then they have until 10/15/2025 to file for their 2021 45L tax credits.
Residential Homes:
Prior to 2023, a builder can receive $2000 per home ( a 4 plex would be $8000, a duplex would be $4000), or up to $2,000 per apartment (up to 3 story buildings only).
For 2023+, construction companies can receive up to $5,000 per home ($10,000 for a duplex, $20,000 for a 4-plex), or $5,000 per apartment (no limit on building height).
Tax credits received in the current year of construction goes against what a builder will pay for taxes whether it’s quarterly or at the end of the current tax year.
They can receive up to $5000 per home in tax credits.
There are a few more requirements for 2023 including a blower test. Homes need to meet a certain requirement to pass inspection as well as earn the credit.
A builder can collect these credits for new homes built each year going forward through 2035.
Once our company has certified the builder’s homes for the 45L program, we will complete the IRS form 8908 for the builder for every year awarded (going back three years).
For tax credits awarded on previous years, the builder needs to file an amended federal income tax return using the 8908 form. They will then receive tax refunds from the IRS.
For 45L tax credits received in the current year, the builder will receive a credit for taxes owed.
The auditor will request the 45L certificates and addresses to the properties. The auditor will verify that there is in fact a residence at the address on the certificate (usually by using Google) then they approve the audit.
If there is additional information needed, the builder can reach our company and we will provide any additional information needed.
It takes the IRS typically 2-4 months to amend the returns and send the refund checks. If a builder has a direct deposit setup with the IRS, then the refund typically get deposited in 1-2 months.