Energy Efficient Home Tax Credit – Sec. 45L – FAQ No. 1 – Who can claim the credit – Homeowner or Builder?

The energy tax credit under Internal Revenue Code Section 45L for energy efficient construction is a valuable tax credit for incentivizing using energy efficient lighting, HVAC, insulation, windows and other aspects that results in the home or apartment using less energy. The reward is a $2000 per unit tax credit under 45L.

As to who gets this credit, the misnomer is that it’s always the homeowner that gets this credit since they own the home. However, it depends upon who as the basis in the construction of the unit and which party owns the home when it’s first sold, or when an apartment unit is first rented. The IRS awards the energy tax credit under 45L to the ‘eligible contractor’ who is the party constructing the home or apartment and has the basis in these construction costs. Therefore, it’s much more common that the developer/builder gets the 45L tax credit and not the first homeowner or renter. Many developers don’t realize this is an energy credit specifically targeted at their activities – the credit incentivizes the builder to use more energy efficient construction materials, not the end user or homeowner who purchases the property.

We work almost exclusively with developers and builders on the Energy Efficient Home Tax Credit. Please call us to have one of our energy engineers review your properties under construction (or completed properties) to see if you qualify under IRC 45L.

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