An Update on 45L following the PATH Act Release

Recent tax legislation extended the Energy Efficient Home Credit (45L). 45L is a $2,000 federal tax credit per free-standing home, per townhouse and per apartment where units and apartment buildings are three stories or less above ground. There is a $1,000 federal tax credit available per manufactured home.

Properties must be substantially completed after August 8, 2005, and must be sold or leased during the tax year the credit is being claimed. For example, if the credit is being claimed for 100 units in the 2015 tax year, all 100 units must have been leased or sold in 2015. This provision applies between January 1, 2006, and December 31, 2016.

Subject properties will be compared to a reference unit in the same climate zone. A reference unit is a comparable unit constructed at the minimum standards of Chapter 4 of the 2004 IECC Supplement (International Energy Conservation Code). The reference dwelling will have an A/C with a SEER of 13, heat pumps at a SEER of 13 and a heating seasonal performance factor of 7.7. All three of these requirements are the bare minimum according to Chapter 4 of the IECCSupplement. Heating and cooling energy consumption must be at least 50% below that of the reference unit and 10% of the 50% must be due to the building envelope improvements.

An eligible contractor must obtain certification for each dwelling unit from an eligible certifier before claiming the 45L tax credit. An eligible certifier has been accredited and authorized by the Residential Energy Services Network (RESNET) or an equivalent rating network. The certification process includes the certifier to run computer modeling for each dwelling unit and on-site testing. The certification package includes a certificate for each dwelling unit and a declaration that under penalties of perjury the certifier believes that the facts in the certification are true, correct and complete.

Typical fees for certification are done on a per dwelling unit basis for units that pass. In some cases, remedial measures are needed for the dwelling units to pass.

179D Apts Hotels_FINAL_April 2018
179D EPAct Information Checklist FINAL
179D Overview Energy Efficient Deductions_FINAL_April 2018
SECTION 45L FEASIBILITY QUESTIONNAIRE
Overview of Changes in Presentation of Financial Statements of Not-for-Profit Entities (Topic 958) – A Summary of Accounting Standards Update (ASU) 2016-14

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