Midwest Energy Consultants

Tax Credits for Home Builders

Federal Tax Credits for Builders of Energy Efficient Homes

As part of the recently passed Inflation Reduction Act, the Section 45L Tax Credit for Energy Efficient New Homes has been updated and extended. For homes and units acquired on or after January 1, 2023, the base level tax credit will be specifically tied to ENERGY STAR certification for single-family, manufactured, and multifamily homes. This tax credit has been extended through 2032. Details are below:
 

  • Single-Family New Homes – $2,500 available for ENERGY STAR certified homes.
  • January 1, 2023 – December 31, 2024: ENERGY STAR Single-Family New Home National Version 3.1 (or the regional program requirements applicable to the home).
  • January 1, 2025 – December 31, 2032: ENERGY STAR Single-Family New Homes National Version 3.2 (or the regional program requirements applicable to the home).
  • Manufactured Homes – $2,500 available for ENERGY STAR certified manufactured homes meeting the most recent ENERGY STAR Manufactured New Homes program requirements (currently Version 2, with Version 2.1 currently proposed to be implemented in May 2023).
  • Multifamily – $500 available for ENERGY STAR certified multifamily units meeting the ENERGY STAR Multifamily New Construction National program requirements (or the regional program requirements) applicable to the dwelling unit, as specified in Section 13304. A larger tax credit is available for multifamily projects that meet prevailing wage requirements.

A larger tax credit is available for homes that are certified to DOE’s Zero Energy Ready (ZERH) Program, which requires ENERGY STAR certification as a prerequisite.

All official information related to the tax credit will be determined and published by the IRS. The ENERGY STAR team is committed to keeping our partners informed as the IRS works to develop updated documents and guidance.

Disclaimer: This webpage provides an overview of the DOE Zero Energy Ready Home program and how it relates to the New Energy Efficient Home Tax Credit found in section 45L of the Internal Revenue Code. The information provided here does not constitute professional tax advice or other professional financial guidance. It should not be used as the only source of information when making decisions regarding design, purchasing, investments, or the tax implications of new home construction, or when executing other binding agreements. In the event that there is conflict between information provided on this webpage and guidance or notices published by IRS, the information published by IRS shall take precedence.