§45L — New energy efficient home credit
Statute Text — 26 U.S.C. §45L
For purposes of section 38, in the case of an eligible contractor, the new energy efficient home credit for the taxable year is the applicable amount for each qualified new energy efficient home which is—
constructed by the eligible contractor, and
acquired by a person from such eligible contractor for use as a residence during the taxable year.
For purposes of paragraph (1), the applicable amount is an amount equal to—
in the case of a dwelling unit which is eligible to participate in the Energy Star Residential New Construction Program or the Energy Star Manufactured New Homes program—
which meets the requirements of subsection (c)(1)(A) (and which does not meet the requirements of subsection (c)(1)(B)), $2,500, and
which meets the requirements of subsection (c)(1)(B), $5,000, and
in the case of a dwelling unit which is part of a building eligible to participate in the Energy Star Multifamily New Construction Program—
which meets the requirements of subsection (c)(1)(A) (and which does not meet the requirements of subsection (c)(1)(B)), $500, and
which meets the requirements of subsection (c)(1)(B), $1,000.
For purposes of this section—
The term “eligible contractor” means—
the person who constructed the qualified new energy efficient home, or
in the case of a qualified new energy efficient home which is a manufactured home, the manufactured home producer of such home.
The term “qualified new energy efficient home” means a dwelling unit—
located in the United States,
the construction of which is substantially completed after the date of the enactment of this section, and
which meets the energy saving requirements of subsection (c).
The term “construction” includes substantial reconstruction and rehabilitation.
The term “acquire” includes purchase.
A dwelling unit meets the requirements of this subparagraph if such dwelling unit meets the requirements of paragraph (2) or (3) (whichever is applicable).
A dwelling unit meets the requirements of this subparagraph if such dwelling unit is certified as a zero energy ready home under the zero energy ready home program of the Department of Energy as in effect on January 1, 2023 (or any successor program determined by the Secretary).
A dwelling unit meets the requirements of this paragraph if—
such dwelling unit meets—
in the case of a dwelling unit acquired before
January 1, 2025
, the Energy Star Single-Family New Homes National Program Requirements 3.1, or
in the case of a dwelling unit acquired after
December 31, 2024
, the Energy Star Single-Family New Homes National Program Requirements 3.2, and
the most recent Energy Star Single-Family New Homes Program Requirements applicable to the location of such dwelling unit (as in effect on the latter of
January 1, 2023
, or January 1 of two calendar years prior to the date the dwelling unit was acquired), or
such dwelling unit meets the most recent Energy Star Manufactured Home National program requirements as in effect on the latter of
January 1, 2023
, or January 1 of two calendar years prior to the date such dwelling unit is acquired.
A dwelling unit meets the requirements of this paragraph if—
such dwelling unit meets the most recent Energy Star Multifamily New Construction National Program Requirements (as in effect on either
January 1, 2023
, or January 1 of three calendar years prior to the date the dwelling was acquired, whichever is later), and
such dwelling unit meets the most recent Energy Star Multifamily New Construction Regional Program Requirements applicable to the location of such dwelling unit (as in effect on either
January 1, 2023
, or January 1 of three calendar years prior to the date the dwelling was acquired, whichever is later).
A certification described in subsection (c) shall be made in accordance with guidance prescribed by the Secretary, after consultation with the Secretary of Energy. Such guidance shall specify procedures and methods for calculating energy and cost savings.
Any certification described in subsection (c) shall be made in writing in a manner which specifies in readily verifiable fashion the energy efficient building envelope components and energy efficient heating or cooling equipment installed and their respective rated energy efficiency performance.
For purposes of this subtitle, if a credit is allowed under this section in connection with any expenditure for any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so determined. This subsection shall not apply for purposes of determining the adjusted basis of any building under section 42.
For purposes of this section, expenditures taken into account under section 47 or 48(a) shall not be taken into account under this section.
In the case of a qualifying residence described in subsection (a)(2)(B) meeting the prevailing wage requirements of paragraph (2)(A), the credit amount allowed with respect to such residence shall be—
$2,500 in the case of a residence which meets the requirements of subparagraph (A) of subsection (c)(1) (and which does not meet the requirements of subparagraph (B) of such subsection), and
$5,000 in the case of a residence which meets the requirements of subsection (c)(1)(B).
The requirements described in this subparagraph with respect to any qualified residence are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in the construction of such residence shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such residence is located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code.
Rules similar to the rules of section 45(b)(7)(B) shall apply.
The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.
This section shall not apply to any qualified new energy efficient home acquired after June 30, 2026.
Treasury Regulations
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Treas. Reg. §1.45L-3Rules relating to the increased credit amount for prevailing wage
(a) In general. With respect to a qualified residence described in section 45L(a)(2)(B), the credit determined under section 45L(a)(2)(B)(i) is $2,500 and the credit determined under section 45L(a)(2)(B)(ii) is $5,000 if the qualified residence described in section 45L(a)(2)(B)—
(1) Meets the requirements under section 45L(c)(1)(A) or 45L(c)(1)(B), as applicable;
(2) Is constructed by an eligible contractor;
(3) Is acquired by a person for use as a residence during the taxable year; and
(4) Satisfies the prevailing wage requirements of section 45(b)(7) and § 1.45-7, and the recordkeeping and reporting requirements of § 1.45-12, with respect to the construction of the qualified residence before such residence is acquired by a person for use as a residence.
(b) Definitions—(1) Qualified residence. For purposes of this section, a qualified residence means a qualified new energy efficient home as defined in section 45L(b)(2).
(2) Eligible contractor. For purposes of this section, an eligible contractor means an eligible contractor as defined in section 45L(b)(1).
(c) Applicability date. This section applies to any qualified new energy efficient home acquired for use as a residence in taxable years ending after June 25, 2024, and the construction of which begins after June 25, 2024. Taxpayers may apply this section to any qualified new energy efficient home acquired for use as a residence in taxable years ending on or before June 25, 2024, and any qualified new energy efficient home acquired for use as a residence in taxable years ending after June 25, 2024, the construction of which begins before June 25, 2024, provided that taxpayers follow this section in its entirety and in a consistent manner.
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Treas. Reg. §1.45L-3(a)In general.
In general. With respect to a qualified residence described in section 45L(a)(2)(B), the credit determined under section 45L(a)(2)(B)(i) is $2,500 and the credit determined under section 45L(a)(2)(B)(ii) is $5,000 if the qualified residence described in section 45L(a)(2)(B)—
(1) Meets the requirements under section 45L(c)(1)(A) or 45L(c)(1)(B), as applicable;
(2) Is constructed by an eligible contractor;
(3) Is acquired by a person for use as a residence during the taxable year; and
(4) Satisfies the prevailing wage requirements of section 45(b)(7) and § 1.45-7, and the recordkeeping and reporting requirements of § 1.45-12, with respect to the construction of the qualified residence before such residence is acquired by a person for use as a residence.
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Treas. Reg. §1.45L-3(b)Definitions—(1) Qualified residence.
Definitions—(1) Qualified residence. For purposes of this section, a qualified residence means a qualified new energy efficient home as defined in section 45L(b)(2).
(2) Eligible contractor. For purposes of this section, an eligible contractor means an eligible contractor as defined in section 45L(b)(1).
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Treas. Reg. §1.45L-3(c)Applicability date.
Applicability date. This section applies to any qualified new energy efficient home acquired for use as a residence in taxable years ending after June 25, 2024, and the construction of which begins after June 25, 2024. Taxpayers may apply this section to any qualified new energy efficient home acquired for use as a residence in taxable years ending on or before June 25, 2024, and any qualified new energy efficient home acquired for use as a residence in taxable years ending after June 25, 2024, the construction of which begins before June 25, 2024, provided that taxpayers follow this section in its entirety and in a consistent manner.
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