EPACT Study: Section 45L Tax Credit


Hamilton Kwon

Norbert Crabtree
Managing Director

Jennifer Birkemeier

Taking Advantage of the Energy Efficient Home Credit

The Energy Efficient Home Credit, also known as the EPAct 45L Credit, is aimed at benefiting residential home developers.

In order to claim the 45L Credit, however, a developer will need an energy analysis to support its energy efficiency claims. The certification process for buildings already erected includes:

  • An investigation into the composition of the building such as materials used for exterior walls and insulation, securing specifications for HVAC, windows, door and other equipment and determining the lease or sale year for the units
  • An initial review by the third-party expert followed by energy efficient improvements based on this assessment
  • A review by a certified rater of the property via on-site testing and computer modeling, which provides a certification package to use for filing with the IRS.


How the Client Benefits

For residential units meeting the law’s requirements, 45L allows a $2,000 tax credit per unit. For instance, the developer of an eligible 100-unit apartment building may realize a $200,000 tax benefit.

Who Is Eligible

The credit is available for residential construction begun after January 1, 2006 and before January 1, 2018. Builders must provide improved energy efficiency above certain energy standards put in place in 2004 (ASHRAE Standard 90.1-2001) for the building exterior, HVAC systems or lighting. These improvements must be certified by a qualified third-party. A minimum of 10 units are required for assessment under current regulations.

How We Can Help

STS is a RESNET-certified rater. We have more than a dozen years of experience providing tax and engineering services to CPA firms and their clients. We will work with you and your clients to create the necessary documentation to realize the tax credits and deduction to which taxpayers are entitled.

For more information about Specialty Tax Solutions, contact Norbert Crabtree at 847-527-1234 or 864-593-6131; ask for Specialty Tax Solutions or email us: Norbert Crabtree