Tax Alert: Energy Efficiency Tax Credits for Multifamily Developers Extended as Part of Fiscal Cliff Agreement

In an effort to avert the "Fiscal Cliff", Congress passed the American Taxpayer Relief Act of 2012 on New Year’s Day, and President Obama has vowed to sign this into law soon. This bill extends many key business tax extenders including the Section 45L tax credit which rewards multifamily developers with tax credits of $2,000 per energy efficient apartment unit. The Section 45L tax credit had expired at the end of 2011 but this bill extends the tax credit for another two years, through the end of 2013.

To illustrate how this tax cut works, KBKG recently analyzed a newly constructed 98-unit apartment complex and certified and secured $196,000 (98 x $2,000 per unit) in Section 45L tax credits.

In addition to extending these tax credits, Congress has modified the energy efficiency criteria for units that are leased in 2012 & 2013. With state and local energy codes having been made more stringent in recent years, great potential exists for developments to already meet the criteria for these tax credits. KBKG has successfully secured millions in Section 45L tax credits for developers throughout the country.

If you are currently developing or have developed a multifamily project in the past 5 years, you may be a good candidate to secure these tax credits. Call us today or visit and answer a few questions to see if you are eligible. Please note that if you have leased any units in 2009, your deadline for retroactively securing missed 2009 tax credits is fast approaching in the next few months.