§ 45L Tax Credit Frequently Asked Questions

List of Frequently Asked Questions

How is the new § 45L Tax Credit different from previous versions?
What are the eligibility requirements for the § 45L Tax Credit?
What type of homes can qualify for the § 45L Tax Credit?
What are the energy-saving requirements for a home to earn the § 45L Tax Credit?
What version of ENERGY STAR program requirements does the § 45L Tax Credit require?
What if a home or apartment is certified to a newer program version than required for the § 45L Tax Credit?
Who is an eligible contractor under the § 45L Tax Credit?
How do I claim the § 45L Tax Credit and what documentation is needed?
Is the required program version for the § 45L Tax Credit based on the permit date or the acquisition date of a home or apartment?
How much money can I receive under the § 45L Tax Credit?
Can I still participate in the ENERGY STAR program without claiming the § 45L Tax Credit?
Are existing homes eligible for the § 45L Tax Credit?
I build in California. How does qualifying for the § 45L Tax Credit differ for me?
Are homes in U.S. territories eligible for the § 45L Tax Credit?
When does ENERGY STAR Version 3.2 go into effect for the § 45L Tax Credit?
How much does it cost to certify a home as ENERGY STAR?
Who can I talk to if I have more questions about the § 45 L Tax Credit or other Tax Credits?

Answers to Frequently Asked Questions

1. How is the new § 45L Tax Credit different from previous versions?

While the §45L Tax Credit for energy-efficient homes has been around for many years, the most recent version contained in the Inflation Reduction Act (IRA) differs significantly from prior iterations. Specifically, earning the new § 45L Tax Credit now requires certification to an eligible version of the U.S. Environmental Protection Agency’s (EPA) ENERGY STAR Residential New Construction program requirements or the Department of Energy’s (DOE) Zero Energy Ready Homes program.

2. What are the eligibility requirements for the § 45L Tax Credit?

The § 45L Tax Credit is available for homes located in the United States that meet specified energy savings requirements, constructed by an eligible contractor, and acquired by a person from such eligible contractor after December 31, 2022, and before January 1, 2033, for use as a residence during the taxable year for which the taxpayer is claiming the § 45L Tax Credit. More information at: IRS Notice 2023-65.

3. What type of homes can qualify for the § 45L Tax Credit?

Single-family, multifamily, and manufactured homes are all eligible for the § 45L Tax Credit. More information about home eligibility requirements can be found at:

4. What are the energy-saving requirements for a home to earn the § 45L Tax Credit?

To meet the energy-saving requirements of the § 45L Tax Credit, a home must be certified to an eligible version of the ENERGY STAR New Construction program requirements or DOE's Zero Energy Ready Home program. Refer to these fact sheets for more information about the energy efficiency measures built into ENERGY STAR certified homes and apartments:

5. What version of ENERGY STAR program requirements does the § 45L Tax Credit require?

The Minimum ENERGY STAR Versions Eligible for the § 45L Tax Credit tables show the minimum program versions eligible by year, as defined by the effective dates for each version set by the EPA and transition timelines established in the § 45L Tax Credit. Program version eligibility for future years will be provided annually in January.

6. What if a home or apartment is certified to a newer program version than required for the § 45L Tax Credit?

Newer versions of the ENERGY STAR program requirements can be used to satisfy the minimum requirements for the § 45L Tax Credit in a given year. For example, in 2023, a home certified to National v3.2 also meets the minimum eligible version for the § 45L Tax Credit in that year, which was National v3.1. More information at: IRS Notice 2023-65.

7. Who is an eligible contractor under the § 45L Tax Credit?

An eligible contractor is defined as the person who constructed the qualified home, owned and had a basis in the qualified home during its construction, and sold or leased the home to a person for use as a residence. For manufactured homes, an eligible contractor is the person who produced the home and owned and had a basis in the qualified home during its production.

If a person who owns and has a basis in a qualified home during its construction hires a third party to construct the home, the person who hired the third-party contractor is the eligible contractor, not the third party. However, a home is not considered to have been acquired if the eligible contractor retains it for use as a residence. For additional details, see Sections 5.01 and 5.02 of IRS Notice 2023-65.

8. How do I claim the § 45L Tax Credit and what documentation is needed?

For details on claiming the § 45L Tax Credit, including information about completing Form 8908 (Energy Efficient Home Credit), visit the IRS website. Eligible contractors are encouraged to practice good recordkeeping of all documents required to support a claim for the § 45L Tax Credit, including proof of ENERGY STAR certification for each home and dwelling unit being claimed. See the ENERGY STAR Policies Related to the § 45L Tax Credit for a list of eligible documents that demonstrate proof of certification for each sector.

9. Is the required program version for the § 45L Tax Credit based on the permit date or the acquisition date of a home or apartment?

For homes to qualify for the § 45L Tax Credit based on ENERGY STAR certification, the minimum eligible program version that must be achieved is determined based on the acquisition date of the home. 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 (see IRS Notice 2023-65). In contrast, § 45L Tax Credit eligibility for DOE’s Zero Energy Ready Homes program is based on the permit date. Partners should also be aware that, for the purpose of earning the ENERGY STAR certification (as opposed to qualifying for the § 45L Tax Credit), the permit date determines the applicable program requirements.

10. How much money can I receive under the § 45L Tax Credit?

A tax credit of $2,500 is available for homes certified to an eligible version of the ENERGY STAR Single-Family New Homes (SFNH) or Manufactured New Homes (MH) program requirements. For a multifamily dwelling unit certified to eligible version of the ENERGY STAR Multifamily New Construction (MFNC) program requirements, the tax credit is $500 per dwelling unit, or $2,500 when prevailing wage requirements are met. Higher tax credits are available for homes that are certified to DOE's Zero Energy Ready Homes program.

11. Can I still participate in the ENERGY STAR program without claiming the § 45L Tax Credit?

Yes! Claiming the § 45L Tax Credit is optional, and some builders may choose to certify homes to versions of the ENERGY STAR program requirements that are not eligible. To see the minimum eligible versions required for the tax credit, consult the Minimum ENERGY STAR Versions Eligible for the § 45L Tax Credit tables; and to see the minimum eligible versions required for ENERGY STAR certification, visit:

12. Are existing homes eligible for the § 45L Tax Credit?

While primarily intended for new construction, existing homes and buildings (e.g., those undergoing substantial reconstruction or rehabilitation) are also eligible to participate in the ENERGY STAR Residential New Construction programs, provided that they meet all program requirements. However, partners should be aware that meeting some program requirements may present unique challenges for existing homes, depending on the scope of the renovation. Learn more at: Guidance for Substantial Reconstruction and Rehabilitation.

13. I build in California. How does qualifying for the § 45L Tax Credit differ for me?

Homes and apartments in California are eligible to earn the § 45L Tax Credit using an eligible version of regional California program requirements. Partners should closely review the minimum eligible version schedule in California, which may differ from other locations based on when the EPA releases new versions of the California regional program requirements.

14. Are homes in U.S. territories eligible for the § 45L Tax Credit?

Homes and apartments in U.S. territories (e.g., Puerto Rico, U.S. Virgin Islands, Guam, and the Northern Mariana Islands) are not eligible for the § 45L Tax Credit. However, homes and apartments in these locations can still earn ENERGY STAR certification. See IRS Notice 2023-65 for more information.

15. When does ENERGY STAR Version 3.2 go into effect for the § 45L Tax Credit?

For homes acquired beginning in 2025, earning the § 45L Tax Credit will require certification to the SFNH National v3.2 program requirements. Learn more about Version 3.2 in the EPA’s Preparing for ENERGY STAR National Version 3.2 webinar, and in the technical specifications. Please note that although the § 45L Tax Credit will require Version 3.2, in most states, homes can continue to be certified using the Version 3.1 requirements in 2025.

16. How much does it cost to certify a home as ENERGY STAR?

You can find estimated cost information in the Cost & Savings Estimates documents in the Additional Resources section of the ENERGY STAR New Construction program requirements webpage. Actual costs will vary by home and depend on a variety of factors, such as the builder’s baseline construction practices, geographic location, house design, and vendor relationships. The EPA does not charge a fee to certify a home as ENERGY STAR, however, builders should expect to pay for a home energy rater to perform the required testing and inspections and to verify that the home meets all applicable ENERGY STAR program requirements for certification.

17. Who can I talk to if I have more questions about the § 45 L Tax Credit or other Tax Credits?

The EPA recommends consulting with a tax professional to determine whether and how you can claim the § 45L Tax Credit and if it 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. Please note that the EPA cannot provide tax guidance.