You May Be Able to Claim the 45L Tax Credit Retroactively Thanks to the New Home Energy Efficiency Act

A new bipartisan bill for the New Home Energy Efficiency Act was proposed to retroactively extend the $2,000 45L Tax Credit. If passed, taxpayers could amend their 2018 tax return and apply the credit from 2018-2020. Starting in 2021, the credit would increase to $2,500 with stricter requirements to qualify.

Background on 45L

The 45L Tax Credit is an energy-efficient tax credit for residential properties. The tax credit is $2,000 per unit to the developers of energy-efficient buildings. Qualifying properties include:

  • Apartments
  • Condos
  • Townhouses
  • Single-family Homes

All eligible properties must be three stories or lower and have to incorporate energy-efficient features such as roofing, windows, doors or HVAC systems.

New Legislation on 45L

The 45L Tax Credit has been extended many times over the years until it expired at the end of 2017. The New Home Energy Efficiency Act would reinstate the credit and incentivize multifamily developers and homebuilders to invest in energy-efficient materials. The bill would be retroactive, so tax returns could be amended in 2018 to take the credit. In 2021, the legislation looks to modify the credit with a new set of energy-efficient standards to qualify and increasing the credit to $2,500.

The Anders Real Estate and Construction Group can help determine if your construction project would qualify for 45L or other tax credits and incentives. Contact an Anders advisor to learn more.