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Part of the Federal Energy Policy Act of 2005, 45L granted builders tax credits for new, single- and multi-family energy-efficient homes.
The original credit expired on December 31, 2021. However, the recently passed Inflation Reduction Act (IRA) extends and enhances the 45L tax credit for builders. The enhanced 45L provision, known as the New Energy Efficient Homes Tax Credit, increases the energy savings requirements to newer standards, but offers a larger tax credit incentive.
As an air seal spray foam easily checks all the boxes required to achieve Energy Star 3.1.11. Save time and operational frustration knowing that your homes will pass.
When does this program begin?
The 45L tax credit is currently funded. For 2022, homebuilders can receive a $2,000 tax credit for any home that is over 50% more efficient than the 2006 International Energy Conservation Code® (IECC®)
New requirements for the 45L tax credit become effective on January 1, 2023. The enhancements will provide a $2,500 tax credit for homes built to Energy Star 3.1.11 and a $5,000 tax credit for homes built to the DOE Zero Energy Ready Homes program (DOE ZERH 1.7)
When does this program expire?
The 45L tax credit is funded through December 31, 2032.
How do I file for the tax credit?
Via year-end tax filing.
What documents do I need to file?
Homebuilders can apply for the 45L tax credit by filling out IRS Form 8908, Energy Efficient Home Credit, while doing their federal tax return. For information about Form 8908 or to find the actual form, visit: https://www.irs.gov/forms-pubs/about-form-8908. Note: This information is subject to change as the IRS issues new guidance.
How do I know If my homes comply with the 45L provision?
By partnering with Energy Star, a rater will verify your home meets either Energy Star 3.1.11 or Department of Energy ZEHR
Who certifies I have earned this credit? / How do I get certification?
You will need to contact a local energy rater. https://www.resnet.us/
How do I become an Energy Star New Construction Partner?
This website brings you directly to the application process: https://www.energystar.gov/partner_resources/join_energy_star/new_home_construction
How does spray foam insulation help me qualify for this tax credit?
Spray foam is an industry-leading building solution that seals and insulates in one application. There are several ways using spray foam insulation can qualify. Here are just a couple:
How much can I receive in tax credit?
Energy Star 3.1.11 = $2500 per single-family detached home and $500 per multifamily unit
DoE ZEHR 1.7 = $5000 per single-family detached home and $1000 per multifamily unit
How does spray foam assist in acquiring the ZERH credit?
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Need a highly qualified contractor to consult with to determine the right spray foam insulation package to meet program requirements? The HBS experts are here to support you.
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The Woodlands, Texas 77380