It’s easy to underestimate the 45L Tax Credit. Over the years, the EPAct 179D Deduction has gotten a great deal of press, with 45L often presented as an afterthought, if at all. However, this oft overlooked incentive brings tremendous benefit, and is a key strategy to consider as you plan for 9/15.
The 45L credit is a federal tax credit that promotes the construction of energy efficient residential dwellings. The credit is available to builders, developers, and others who build homes for sale or lease. This one-time incentive can pack quite a punch, with each eligible dwelling unit able to claim $2,000 in tax credits. The credit can even be claimed retroactively for up to 3 years.
Single and multifamily homes up to 3 stories above grade are eligible for the 45L tax credit, including:
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- Assisted living facilities
- Campus residential housing
- For-lease apartment buildings
- Condominiums
- Tract and custom single-family homes
Dwelling units within each property are assessed individually. It’s not an “all or nothing” proposition – some units may meet the criteria, and some may not. The entire property doesn’t need to qualify.
Dwelling units that meet the following criteria may claim the credit:
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