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The 45L Energy Efficient New Home Tax Credit Has been renewed for 2018, 2019 and 2020

On December 20, 2019 President Trump signed into law legislation extending the energy efficient new home tax credit.  This law provides for a three year extension of the The "Energy Efficient New Home Credit" known in the IRS Tax Code as 45L.  This credit will cover homes built in 2020 and retroactively cover homes built in 2018 and 2019.  The tax credit  typically amounts to $2,000 per home and $1000 per manufactured home and is claimed using IRS FORM 8908.

Qualifying properties include apartments, condominiums, townhouses and single family homes three stories or less.  Eligible construction also includes substantial reconstruction and rehabilitation of existing homes.  The 45L tax credit may also be claimed retroactively if not claimed on previous tax returns.

See IRS Form 8908 http://www.irs.gov/pub/irs-pdf/f8908.pdf  and instructions  http://www.irs.gov/pub/irs-pdf/i8908.pdf

*** The 2018 version of Form 8908 was never published by the IRS and the 2019 version will be published later in January.  Please check back for updates.***

 Qualifying dwellings must meet the following criteria:

***The IRS defines a dwelling as a "single unit providing complete independent living facilities for one or more persons, including permanent provisions for living, sleeping, eating, cooking and sanitation."***

  • Must be located in the United States.
  • Construction must be substantially completed after August 8, 2005 and before December 31, 2020.
  • Construction must meet the statutory energy savings requirements of Code Section 45L(c). 
  • Must be acquired from the eligible contractor for use as a residence.

Types of projects that qualify for the Tax Credit: 

  • New Single Family Dwelling
  • New Condominiums
  • New Apartments
  • New College and University Apartment Units
  • Substantially reconstructed or rehabilitated Homes

Procedure to claim the 45L Tax Credit

Contact us so we we may provide you additional information with directions on how to submit your projects for review.  The initial review is free, without obligation.

 


 TaxCredit Vs. Tax Deduction - A tax credit is more valuable than a tax deduction

A tax credit lowers your taxes dollar for dollar. A deduction reduces your taxable income, so the value depends on your tax bracket.

FOR EXAMPLE:  If you're in the 25% bracket, a $1,000 tax deduction would lower your tax bill by just $250. But a $1,000 tax credit lowers your tax bill by the full $1,000 no matter which bracket you are in.  A tax credit is more powerful than a deduction.