45L for Contractors and Builders

Contractors and Builders

construction workerContractors and builders of energy efficient apartments and homes are able to reward their efforts by obtaining 45L Energy Efficient Home Credits. 45L is a lucrative tax incentive for the construction or renovation of single-family homes and low-rise residential buildings that have reduced its energy consumption by 50%.

45L allows qualifying builders and contractors to collect up to $2000 for each unit of property that meets the certified energy efficient standards.

Eligible contractors and builders must own and have a basis in the qualified energy efficient home during its construction.

Eligible contractors/builders are defined by the IRS as

  • Individuals
  • A trust
  • An estate
  • A partnership
  • An association
  • A company
  • A corporation

In order to receive the benefits, builders and contractors must apply and document their installments before the construction crew breaks ground.

Qualifying project characteristics

  • Project must be three stories or less above ground (not including below-grade parking)
  • Project must be built on the territory of the United States
  • Project must meet construction standards based on those set by the 2006 International Energy Conservation Code (IECC)
  • Project must be completed between August 8, 2005, and December 31, 2017
  • Construction can include “substantial” rehabilitation and reconstruction

Energy efficient features include

  • Wall insulation R-13+
  • Roof insulation R-38+
  • Foundations and slabs with extra insulation
  • Vinyl low thermal emissivity windows
  • Double or triple pane windows
  • Insulated exterior doors
  • Reflective roofing materials
  • Air conditioning with SEER (Seasonal Energy Efficiency Rating) of 13+
  • Gas furnaces with at least 80 percent efficiency, or radiant heating systems

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