Why KBKG for Claiming 45L Credits

Educating multifamily developers on tax credits for energy-efficient homes

Working with a reputable and ethical tax consultant is essential for any multifamily home developer looking for ways to benefit from energy-efficient tax programs. As a trusted source of knowledge since 1999, KBKG’s expertise has helped affordable housing and other developers claim various Green Building Tax Incentives, like the 45L Tax Credit. 

By partnering with KBKG, developers have effectively minimized the costs associated with developing more energy-efficient homes. KBKG’s experts are renowned within the industry and stay updated with the latest changes to the 45L program to ensure those who qualify receive the maximum possible tax benefits they qualify for.  

History of the 45L Tax Credit

Initially launched in 2005 as part of the Energy Policy Act, the 45L Tax Credit serves as a Green Building Tax Incentive that rewards multifamily developers, investors, and homebuilders for developing energy-efficient homes. To be eligible for the maximum amount, these houses must be designed to meet the established energy-efficiency and construction related criteria and be sold to homeowners or leased to tenants for use as a residence.  

With new legislation put in place by the Inflation Reduction Act, this tax incentive has been extended through the end of 2032 with expanded benefits added on. Starting January 1, 2023, both single and multifamily developers can be eligible for an increased maximum tax credit of up to $5,000 per dwelling unit. To meet the requirements needed to qualify for the credit, candidates must develop homes that align with certain energy efficiency and construction related standards. The highest credit tier is reserved for solar ready homes built for improved indoor air quality.

Finding the Right 45L Provider

Tax law is complex, and continuous new legislation makes understanding it even more complicated. With frequently changing guidelines, choosing the right partner to help navigate through the intricacies of Green Building Tax Incentives is now more critical than ever, which is why KBKG stands by these core values:  

INTEGRITY : Tax professionals should have a verifiable reputation based on their integrity. Bad actors provide inaccurate information about qualifying for specific programs for personal gain. Guidance on these programs should be based on an up-to-date understanding of all the modifications of the tax code and the most current recommendations from the IRS. 

OBJECTIVITY : A desire to obtain or retain client participation does not influence reputable tax professionals. Their focus is adhering to tax law and discovering the legal avenues available to clients.  

COMPETENCE : Experienced and trained professionals have a granular understanding of the details behind incentivized tax programs. They help determine whether a business qualifies for these programs by calculating eligibility and value. 

HONESTY : Specialized tax professionals help CPAs and businesses benefit from the tax programs available to them. They never lead clients to claim credits they are not eligible for. Look for a provider who commits to accurately guiding clients on various tax issues. 

CONFIDENTIALITY : Reputable consultants safeguard sensitive personal, business, and financial information. The confidentiality of information should be their highest priority. 

How to Claim 45L

To certify a housing development’s eligibility for the 45L Tax Credit, a third-party verifier, like KBKG, is required. Reaching out to an expert before construction starts is a necessary step in the process of claiming 45L, as milestone inspections and diagnostic testing of the homes are also necessary to meet the certification requirements under the Internal Revenue Code Section 45L.  

With certified personnel on hand and an in-house, multidisciplinary team of engineers and industry-leading tax experts, candidates seeking to claim this Green Building Tax Incentive are encouraged to contact a KBKG expert. 

While accounting principles vary from business to business, KBKG understands the significance of bringing value to those it serves by being a client-centric firm. Its historic reputation for delivering quantifiable results is a testament to why businesses continually choose to partner with KBKG.