The 45L Tax Credit Process

Priority Energy’s HERS Raters are very familiar with the 45L Tax Credit program and Nicor's Energy Efficiency packages. They can help with the energy efficiency requirements and verifications needed so you qualify for the incentives.

 Priorioty Energy can help you attain the credit by:

  1. Designing a new home that will qualify (with Energy Modeling)
  2. Inspecting and certifying an energy efficient dwelling (HERS Rating)
  3. Preparing the Tax Credit statement

What is the 45L Federal Tax Credit?

Builders can earn up to $2000 in tax credit for each energy efficient new home they construct and sell.

In December 2019 Congress extended the Section 45L Tax Credit for energy efficient new homes to encourage the industry to build more high-performance homes. They have also made the program retroactive which means homes, (defined below), built between 2018 through December of 2020 are eligible for the tax savings.

What are the energy efficiency requirements for the 45L tax credit?

The efficiency requirements remain unchanged from the original tax credit program. With today’s more stringent IECC 2018 code in effect, most current construction will qualify. Homes must be 50% more efficient on heating, cooling and hot water use than the IECC 2006 standards. (This does not include lighting and appliances). Proof of this is measured with a HERS Rating.

Who is eligible for the 45L tax credit?

An eligible contractor is the person who constructed the qualified energy efficient home (or produced a qualified energy efficient home that is a manufactured home). A person must own and have a basis in the qualified energy efficient home during its construction to qualify as an eligible contractor with respect to the home. For example, if the person that hires a third party contractor to construct the home owns and has the basis in the home during construction, the person that hires the third party contractor is the eligible contractor and the third party contractor is not an eligible contractor.  This includes:

  • Single Family builders/developers
  • Multi-family builders/developers

What types of property are eligible for the 45L Tax Credit?

• Single Family Homes
• Affordable Housing (LIHTC)
• Apartment buildings
• Assisted living housing
• Production home developments
• Residential condominiums
• Student housing
• Substantial reconstruction or rehabilitation

What is the process to get the tax credit?

Each dwelling must have an energy use analysis to verify it meets the efficiency requirements.  Priority Energy's certified RESNET Raters will create an Energy Model and HERS Rating for your property. Get you project verified and take advantage of the $2000 tax credit available to you. Contact us at 1.312.767.9047.

More info on the tax credit can be found at: https://www.law.cornell.edu/uscode/text/26/45L