Status of 45L Energy Efficient Home Tax Credit – November 2019

Many of our clients have been asking about an update on whether Congress will re-new the Section 45L energy efficient home tax credit which allows developers to claim a $2,000 per door tax credit for homes or apartment complexes meeting certain energy efficient standards (those standards at this point relate back to 2006).

This tax credit is tied up in a possible ‘tax extenders bill’ or package which has been discussed many times this year and the latest as of November 2019 is to possibly tie the tax extenders in with a budget approval bill, next one due on November 21 when a stop-gap bill would need to be approved to keep the government running.

Historically there has been bi-partisan support for these tax extenders even in stand-alone bills, but likely this year, it would be tied to a larger bill. Obvious distractions of recent include impeachment hearings, but one proposal may be to include the tax extenders in with California wildfire relief.  The biggest proponent of energy tax credits and incentives (which would include the 45L energy tax credit for energy efficient homes) is Sen. Grassley of Iowa and his support for the biodiesel tax credit. Also most likely included in a tax package is an expansion of the child tax credit.

As the year end approaches, we will monitor any tax bills and provide more specifics including potentially changing the standards for claiming the energy efficient home tax credit and other changes to the energy tax credit under 45L; these suggestions were included in an earlier bill this summer. Stay tuned for a blog entry on those changes if that bill gains traction.

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