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45L Tax
Credit FAQs

Your 45L questions, answered.

Frequently Asked Questions for
45L Tax Credit

What is the 45L tax credit?

45L Energy Efficient Home Credit rewards builders and homeowners for constructing or substantially renovating energy-efficient homes.

How much is the credit worth?

The tax credit could be in the range of $500 – $5000 per unit for dwelling units placed in service starting from 2023.

Who is eligible for the credit?

Builders and developers who construct or renovate residential properties.

What types of homes qualify?

Single-family detached homes, townhouses, duplexes, condominiums, garden-style apartments, assisted living facilities, manufactured homes, and student housing meeting specific energy efficiency standards.

How long is the credit available?

The Inflation Reduction Act extended the tax credit to homes acquired (leased or sold) between January 1, 2023, and December 31, 2032.

Are homes acquired before 2023 eligible for the credit?

Yes, although the credit amount is $2,000 per unit for single-family and multi-family projects (3 stories or less) or $1,000 per unit for manufactured homes.

Who claims the credit?

Typically, the builder or developer who have basis during construction claim the credit.

How do I claim the credit?

File Form 8908 with your tax return. Certification by a qualified individual is a requirement.

When do I claim the credit?

You can claim the credit in the year your home is acquired (leased or sold).

Do I need special documentation?

Yes, you’ll need an energy certification by an eligible certifier and proof of compliance with program requirements.

What about multifamily housing?

Credits range from $500-$5,000 per dwelling unit depending on certification and prevailing wage requirements.

What about renovations?

Only substantial renovations that meet specific energy efficiency improvements qualify.

What are the energy efficiency standards?

Homes must meet either ENERGY STAR or DOE Zero Energy Ready program requirements to qualify between 2023 – 2032.

Can I use the credit with other tax incentives?

Yes, in some cases, but consult a tax professional for potential interactions.

45L Tax Credit Insights