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
This Month’s Webinars
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
KBKG to Attend and Exhibit at the UCLA Tax Controversy Conference
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
KBKG to Exhibit ACEC Fall Conference
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
Inflation Reduction Act Expands Payroll Tax Credit Benefits for Small Businesses
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
KBKG to Exhibit, Sponsor, and Speak at the TXCPA Free CPE Expo
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
KBKG to Speak and Exhibit at Tax Alliance Conference
Our Regional Director, Bill Taylor is speaking about Employee Retention Tax Credits & Impact on Research and Development Tax Credits, CCM, and TX Law Changes at the Tax Alliance Conference on June 7th. Joining him is our Regional Director, Matthew Geltz, and he is representing KBKG at the exhibition hall. The Tax Alliance Conference is … Read More
KBKG to Speak and Exhibit at FICPA MEGA CPE Conference
Research & Development Tax Credit Principal, Jonathan Tucker and Director, Ian Williams will be speaking on Research and Development Tax Credits Overview and Recent Updates. Their presentation is taking place on Thursday, June 9th from 10:30 AM – 11:20 AM. Regional Director, Chad Niehaus is speaking in a 25-minute Ted-Talk, a new way of presenting … Read More
KBKG to Speak at NECANN Illinois Conference
On Friday, June 10th from 1-1:50 PM, our Senior Manager, Tetyana Guguchkina, is speaking about R&D Tax Credit for the Cannabis industry at this year’s NECANN Illinois. Joining her are Robert VanDeVeire and Kyle Ernsberger from our Midwest office. NECANN Illinois is taking place from June 10th to June 11th at the McCormick Place Lakeside … Read More
KBKG to Exhibit and Sponsor the NJCPA Convention & Expo
This year, Sumit Sharma, Paul McVoy, Alexis McClellan, and Justin Brumfield will be representing KBKG at the NJCPA Convention & Expo. This conference takes place from June 14th to June 17th at NJCPA Convention & Expo in Atlantic City. About the NJCPA Convention & Expo The NJCPA Convention & Expo knows that there are mega-changes … Read More