What is the 45L Tax Credit?
The 45L Tax Credit is a Federal Tax Credit worth $2,000 per dwelling unit that rewards multifamily developers, investors, and homebuilders that develop energy efficient homes and units that are sold or leased after December 31, 2005.
Starting in 2023, the Inflation Reduction Act increases the tax credit amount to as much as $5,000 per dwelling unit for both single-family and multifamily developments. Additionally, the energy efficiency criteria changes to align with Department of Energy programs for Energy Star and Zero Energy Ready Homes. As a result, all residential developments become eligible whereas prior, only low-rise residential developments were eligible.
Eligible Apartment Buildings, Condos, & Single Family Home Developments
A dwelling unit should provide a level of heating and cooling energy consumption that is significantly less than certain energy standards. Based on current construction trends and local building codes, many developments are adopting energy efficient measures that help towards qualification of the 45L tax credits.
Impact of the Inflation Reduction Act on 45L Tax Credits
*Starting in 2023, mid-rise and high-rise projects are eligible for 45L; 3 stories or less above grade is no longer a requirement.
Who is an Ideal Candidate for the 45L Tax Credits?
All apartment buildings, residential condominiums, and single family home developments with 20 or more units can be assessed for energy tax credits. Eligible construction also includes substantial reconstruction and rehabilitation.
What is the Process of the 45L Tax Credits?
The basis for developing and supporting this tax credit is a detailed energy analysis that must be certified by a qualified third-party. Our multi-disciplinary team of engineers and tax experts will ensure that you obtain the maximum tax credits and provide all the documentation necessary to sustain an IRS audit.
“Every residential developer
should consider 45L tax
credits as part of their
tax reduction strategy“
What are the Benefits of the 45L Tax Credit?
The Energy Efficient Home Credit offers a tax credit of $2,000 per dwelling unit to developers of energy efficient buildings completed after August 8, 2005. Below is a sample of expected benefits based on the number of qualified dwelling units.
45L Tax Insights
Take Advantage of the 45L Tax Credit for Residential Development Residential builders, investors, and developers can now qualify for up to $5,000 in tax credits for every energy-efficient dwelling unit. The IRS updated its 45L tax credit program in 2023 to align with Department of Energy programs for Energy Star and Zero Energy Ready Homes. … Read More
Why KBKG for Claiming 45L Credits Educating housing 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 … Read More
Green Building Tax Incentives and How the Inflation Reduction Act Expanded Them A guide to how building owners and designers benefit from constructing a more sustainable future To create more environmentally responsible practices in the construction sector and boost the utilization of energy-efficient materials in commercial and residential buildings, the federal government has implemented a … Read More
IRS Issues New Guidance for 45L Tax Credit Meeting energy-efficiency requirements can make projects eligible for the maximum amount of $5,000 per unit The Internal Revenue Service (IRS) recently issued new guidance with Notice 2023-65, surrounding the 45L Tax Credit that impacts how single-family, multifamily, and manufactured homes qualify for this Green Building Tax Incentive. … Read More
Looking for CPE credit? We have several sessions available this month. Click the links below to register. If you have questions or need help registering, please email [email protected]. Research & Development Tax Credits 11/1/2022 | 12:00 PM PT | 1 hour | 1 CPE credit This webinar will cover the fundamentals of the Research and … Read More
Attending the UCLA Tax Controversy Conference is our CEO, Gian Pazzia, Principals, Jason Melillo and Kevin Zolriasatain, alongside our Director, Lon O’Connor, Chau Pham, and Lee Melbourne-Weaver. This event takes place on Thursday, October 27th at the Beverly Hills Hotel in Los, Angeles. About the Event UCLA Extension’s Annual Tax Controversy Conference is the preeminent … Read More
Attending the ACEC Fall Conference is Regional Director, Andy Gerstenhaber and Senior Business Development Consultant, Karla North who will represent KBKG at the event, which takes place October 16th-18th in Colorado Springs, Colorado. About the Event ACEC’s Fall Conference is the premier industry event with the largest gathering of buyers and decision-makers from engineering firms … Read More
How the Inflation Reduction Act of 2022 Expands Energy Efficiency Tax Incentives for the Real Estate Industry
As featured in Accounting Today On Tuesday, August 16, 2022, President Biden signed the Inflation Reduction Act. Both existing and expired energy efficiency tax incentives including 179D Deductions and 45L Credits have been expanded significantly. Who Benefits? Commercial Building Owners Multifamily Building Owners Investors Developers Homebuilders Architects Engineers Design/Build Contractors Other designers and builders Increase … Read More
The Inflation Reduction Act provides huge opportunities for the real estate industry as well as for architects and engineers. However, the expansion of “green” tax incentives 45L and 179D is not the only tax benefits getting a boost. The newly formed law will also improve upon the R&D Tax Credit. This change will have a … Read More
Our Director of R&D Tax Credits and ERTC, Bill Taylor is speaking at the TXCPA Free Expo on June 23rd. Along with him, our Regional Director, Matthew Geltz, is representing KBKG at the exhibit hall. The TXCPA Free CPE Expo is taking place on June 23rd at the UT Commons Conference Center in Texas. About … Read More