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- Tax Credit
IRA Statuatory Location:
13304
Tax Code Location:
26 U.S. Code § 45L
New or Modified Provision:
Modified and extended. The credit had previously expired at end of 2021.Retroactively extended with new rules effective for homes acquired after 2022.
Eligible Recipients:
Homebuilders
Tribal Eligibility:
Yes
Bureau/Office
Funded by:
U.S. Department of Treasury
Description
Provides a tax credit for construction of new energy efficienthomes Homebuilders
Direct Pay Eligibility:
No
Transferability:
No
Stackability:
Yes. Taxpayers claiming the Low-Income Housing Tax Credit do not have toreduce basis for 45L credits claimed.
Energy Community Bonus:
No
Relevant Announcements
- https://www.irs.gov/pub/irs-drop/n-22-48.pdf
- https://www.federalregister.gov/documents/2022/11/30/2022-26108/prevailing-wage-and-apprenticeship-initial-guidance-under-section-45b6bii-and-other-substantially
- https://www.dol.gov/agencies/whd/IRA
- https://www.apprenticeship.gov/inflation-reduction-act-apprenticeship-resources
Related Resources
Additional information is available on the Resources page.Key Details
Period of Availability
2023-2032
Tax Mechanism:
Tax credit for homebuilders
Base Credit Amount:
$2,500 for new homes meeting Energy Star standards; $5,000 forcertified zero-energy ready homes. For multifamily, base amounts are $500 per unit for EnergyStar and $1000 per unit for zero-energy ready.
Bonus Credit Amount:
For multifamily homes, 5 times the base amount if prevailing wagerequirements are met. Initial guidance on the labor provisions is available here. (https://www.federalregister.gov/documents/2022/11/30/2022-26108/prevailing-wage-and-apprenticeship-initial-guidance-under-section-45b6bii-and-other-substantially)