A Valuable Tax Incentive for Responsible Home Builders, the 45L Home Credit, Has Been Extended

A Valuable Tax Incentive for Responsible Home Builders, the 45L Home Credit, Has Been Extended

The §45L Energy Efficient Home Credit (§45L Credit) is a valuable tax incentive that encourages energy efficient design in residential construction. This incentive was set to expire at the end of 2020, but the latest coronavirus relief bill titled the ‘Consolidated Appropriations Act, 2021‘ (“CAA 2021”), extended the §45L Credit through 2021.

BACKGROUND

The §45L Credit allows eligible developers to claim a $2,000 tax credit for each newly constructed or substantially reconstructed qualifying residence. It applies to single family homes, apartments, condominiums, assisted living homes, student housing, and other types of residences. The residences must not be more than three stories above grade in height. This incentive was set to expire in 2020.

CHANGES

The §45L Credit was extended through 2021 and remains essentially the same, with no changes to the credit amount or the energy efficiency baselines needed for residences to be eligible for the credit. The full text of CAA 2021 can be found here, with the §45L update on page 4914:

HOW WE CAN HELP

ICS can provide a free analysis to determine if this credit is feasible, and if so, provide the necessary third-party certifications and tax assistance to benefit from it. For a free consultation, please contact an ICS representative.

Author: Alexander Bagne, JD, CPA, MBA, CCSP

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ICS Inspectors, LLC (ICS) is provides HERS Rating services for both energy inspections for home building code compliance as well as the 45L Energy Efficient Home Credit. ICS provides nationwide service through its offices located throughout the country.