§ 45L Tax Credits for Home Builders
Federal Tax Credits for Builders of Energy Efficient Homes
As part of the Inflation Reduction Act, the Section § 45L New Energy Efficient Home Credit has been updated and extended through 2032. For homes and apartments acquired on or after January 1, 2023, earning the § 45L tax credit now requires certification to an eligible version of the ENERGY STAR program requirements.
- Single-Family Homes - $2,500 available for homes certified to eligible ENERGY STAR Single-Family New Home (SFNH) program requirements.
- Manufactured Homes - $2,500 available for homes certified to eligible ENERGY STAR Manufactured New Home (MH) program requirements.
- Multifamily Homes - $500 available for homes certified to eligible ENERGY STAR Multifamily New Construction (MFNC) program requirements, with a larger tax credit ($2,500) available when prevailing wage requirements are met.
Note that a larger tax credit is also available for homes that are certified to DOE's Zero Energy Ready Home (ZERH) Program.
While primarily intended for new construction, existing homes and buildings (e.g., those undergoing gut rehabilitation) are also eligible to participate in the ENERGY STAR SNFH and MFNC programs. However, partners should be aware that some program requirements present unique challenges for existing homes and buildings, even those undergoing gut rehabilitation. Learn More
Individuals or entities should consult with a tax professional to determine whether and how they can claim the § 45L credit and if the credit can be used with other tax incentives or Federal incentives. For more detailed information about the § 45L tax credit, visit the Internal Revenue Service (IRS) website.
Minimum ENERGY STAR Program Versions Eligible for the § 45L Credit:
The tables below show the minimum ENERGY STAR program versions eligible for the § 45L credit by year, as defined by the effective dates for each version set by the EPA and transition timelines established in § 45L. Program version eligibility for future years will be provided annually in January.
Partners should be aware that, in some cases, a home may be certified as ENERGY STAR using a version of the program requirements that is not eligible for the § 45L credit. For example, in 2025, earning the § 45L tax credit will require that a home be certified to SFNH National v3.2 program requirements; however, in most states, EPA will continue to allow homes to be certified as ENERGY STAR using SFNH National v3.1.
Acquisition Dates
| State/Territory | Single-Family | Manufactured | Multifamily |
|---|---|---|---|
| AL, AK, AR, AZ, CO, CT, DC, DE, GA, IA, ID, IL, IN, KS, KY, LA, MA, MD, ME, MI, MN, MO, MS, MT, NC, ND, NE, NH, NJ, NM, NV, NY, OH, OK, PA, RI, SC, SD, TN, TX, UT, VA, VT, WI, WV, WY | SFNH National v3.1 | MH v2 | MFNC National v1.1 |
| CA | SFNH California v3.3 | MH v2 | MFNC California v1.3 |
| FL | SFNH Florida v.3.1; or SFNH National v3.1 | MH v2 | MFNC National v1.1 |
| HI | SFNH Pacific v3 | MH v2 | MFNC National v1.1 |
| OR, WA | SFNH Oregon and Washington v3.2; or SFNH National v3.2 | MH v2 | MFNC Oregon and Washington v1.2; or MFNC National v1.2 |
Key Points from IRS Notice 2023-65:
In September 2023, the IRS released Notice 2023-65, which clarified several important points for ENERGY STAR partners, including:
- The phrase "meets ENERGY STAR program requirements" means that a home must be ENERGY STAR certified.
- To qualify for the tax credit, an eligible contractor must own the home and have a basis in it during the construction, and they must sell or lease the home to a person for use as a residence.
- A home is not considered to have been acquired if the eligible contractor retains it for use as a residence.
- The term “acquired” includes purchase, as well as leasing by a person from an eligible contractor for use as a residence during the taxable year.
- Newer versions of the ENERGY STAR program requirements can be used to satisfy the minimum requirements (for example, a home that is certified to SFNH National v3.2 also meets the SFNH National v3.1 requirements).
- A dwelling unit built in a location where EPA has defined regional program requirements must meet both national and applicable regional ENERGY STAR program requirements to qualify for the § 45L credit.
- Homes in U.S. territories (e.g., Puerto Rico, U.S. Virgin Islands, Guam, and the Northern Mariana Islands) are not eligible for the § 45L credit (but can still earn ENERGY STAR certification).
ENERGY STAR Policies Related to the § 45L Credit:
In support of the § 45L credit and IRS Notice 2023-65, EPA has adopted new policies (PDF, 2.0 MB) related to the defined effective dates of program requirements, deemed certifications for national and regional program requirements, and accepted documentation of ENERGY STAR certification. Note that these new policies are solely for the purpose of the § 45L credit and do not modify the normal procedures of the ENERGY STAR New Construction programs, nor the technical requirements that dwelling units must meet to earn ENERGY STAR certification.
§ 45L Builder Tax Credit Flyer
View and download a short, helpful overview flyer of the Section § 45L New Energy Efficient Home Credit. The flyer offers a broad summary of the credit, and contains links to help readers find more information.