Energy Incentives · Brief · Working level
The Section 45L new energy-efficient home credit, briefly
Section 45L gives eligible contractors a credit of $2,500 per ENERGY STAR home or $5,000 per Zero Energy Ready home — with lower multifamily amounts restored by prevailing wage compliance. It terminates for homes acquired after June 30, 2026.
Section 45L is the residential counterpart to Section 179D, and the structural opposite: a true tax credit, fixed per dwelling unit, claimed by the builder rather than the owner-occupant. The Inflation Reduction Act rebuilt it for homes acquired after 2022 around the ENERGY STAR and DOE Zero Energy Ready Home (ZERH) programs, and the One Big Beautiful Bill Act ended it for homes acquired after June 30, 2026 — a date that, as of this writing, has passed. What remains is claiming the credit correctly for homes acquired through that date, including on amended returns for open years.
The amounts
The credit is fixed per dwelling unit and depends on program tier, building type, and — for multifamily — prevailing wage compliance.
| Home type | ENERGY STAR | Zero Energy Ready |
|---|---|---|
| Single-family (site-built) | $2,500 | $5,000 |
| Manufactured home | $2,500 | $5,000 |
| Multifamily unit, base | $500 | $1,000 |
| Multifamily unit, prevailing wage met | $2,500 | $5,000 |
Certification is programmatic, not modeled-percentage-based as under 179D: the home must actually be certified under the applicable ENERGY STAR Single-Family, Manufactured, or Multifamily New Construction program (the applicable version varies by acquisition year and region), or under DOE's ZERH program, by an accredited rater. Notice 2023-65 supplies the operative guidance. The substantiation questions — rater credentials, inspection records — parallel those discussed in our certification requirements brief.
The multifamily multiplier turns on prevailing wage only — Davis-Bacon rates paid to laborers and mechanics during construction. Unlike 179D and most IRA credits, 45L imposes no apprenticeship requirement. The wage mechanics, including the cure-payment regime for shortfalls, are covered in our prevailing wage and apprenticeship brief.
Eligible contractor and timing
Only the eligible contractor claims the credit: the person who constructed the qualified home and had an ownership interest in it during construction, or the manufactured-home producer. A fee builder constructing on the landowner's dirt is generally not eligible; the owner-developer is. The credit is claimed on Form 8908 for the year the home is acquired — sold or leased for use as a residence — and, being a general business credit, carries back one year and forward twenty.
Two interactions deserve care. The credit reduces the basis of the home under Section 45L's coordination rules — for a merchant builder this effectively reduces cost of goods sold, so the net benefit is the credit minus tax on the basis reduction, still far better than a deduction of equal face amount (see credits versus deductions). The IRA carved out an exception: the basis reduction does not apply for purposes of computing low-income housing tax credit eligible basis, removing the old conflict between 45L and LIHTC.
Where 45L does not fit
Buildings four stories or more above grade generally fall outside the ENERGY STAR programs referenced by 45L and belong to 179D analysis instead — the dividing line is drawn in our 179D versus 45L comparison. Homes that were built to code minimum without rater engagement during construction usually cannot be certified after the fact; ENERGY STAR requires inspections at framing stage. And the acquisition-date cutoff is unforgiving: a certified home that closed on July 1, 2026 earns nothing. Builders' remaining 45L work is documentation — rater files, closing dates, and wage records for multifamily — for homes acquired on or before June 30, 2026, including amended-return claims for 2022 through 2025.
Frequently asked questions
- How much is the Section 45L credit per home?
- For single-family and manufactured homes: $2,500 for ENERGY STAR certification and $5,000 for DOE Zero Energy Ready Home certification. Multifamily units earn $500 and $1,000 respectively at base rates, rising to $2,500 and $5,000 per unit if prevailing wage requirements are met during construction. The amounts are per dwelling unit and not inflation-indexed.
- Who claims the 45L credit — the builder or the buyer?
- The eligible contractor claims it: the person who constructed the qualified home and owned it during construction, or the producer of a manufactured home. Homebuyers cannot claim 45L. The credit arises in the year the home is acquired from the contractor for use as a residence, not the year construction finishes.
- When does the 45L credit end?
- Under the One Big Beautiful Bill Act, Section 45L does not apply to homes acquired after June 30, 2026. Because the trigger is acquisition — sale or lease for use as a residence — completed homes sitting unsold past that date generate no credit, even if construction began years earlier.