How to Claim Section 45L
Eligibility
The credit applies to eligible contractors who build and sell or lease new energy-efficient homes. Single-family homebuilders, multifamily developers, and manufactured housing contractors qualify.
Calculation
Credit = $2,500/unit (Energy Star) or $5,000/unit (ZERH) for single-family. Multifamily: $500/unit (Energy Star) or $1,000/unit (ZERH). The credit is non-refundable and reduces federal income tax dollar-for-dollar.
Claim
Obtain written energy certification from a qualified certifier. File Form 8908 (Energy Efficient Home Credit) with your federal income tax return for the year the home is sold or leased.
What Is Section 45L?
Section 45L of the Internal Revenue Code provides a tax credit to eligible contractors who build energy-efficient new homes or dwelling units. The credit was originally enacted in 2005 and substantially revised by the Inflation Reduction Act of 2022, which raised credit rates, updated certification standards, and extended the program through 2032.
Under current law, the credit is $2,500 per unit for homes certified under the Energy Star Single-Family New Homes program, and $5,000 per unit for homes meeting the more rigorous Department of Energy Zero Energy Ready Home (ZERH) standard. Separate, lower rates apply to multifamily buildings.
The credit is non-refundable and reduces the contractor's federal income tax liability dollar-for-dollar. Unused credits may be carried back one year and forward twenty years.
Important: The credit belongs to the eligible contractor, not the home buyer. If you are a general contractor who builds and sells homes, you claim the credit — not your customers.
Credit Rates & Stacking
Credit rates vary by certification level and building type. Prevailing wage compliance is required to access the maximum rates for multifamily ZERH projects.
| Certification Tier | Credit Amount | Building Types | Prevailing Wage |
|---|---|---|---|
| Energy Star Certified | $2,500/unit | Single-family, townhomes | N/A |
| Zero Energy Ready | $5,000/unit | Single-family, townhomes | Required for full rate |
| Multifamily — Energy Star | $500/unit | Apartments, condos (3+ stories) | N/A |
| Multifamily — Zero Energy Ready | $1,000/unit | Apartments, condos (3+ stories) | Required for full rate |
Stacking with Other IRA Credits
Claim Process
Commission Energy Certification
Hire a HERS rater or DOE-approved certifier to assess the home before construction is complete.
Obtain Energy Star or ZERH Certification
Receive written certification verifying the home meets the applicable program standard.
Document Prevailing Wage Compliance
If claiming the maximum ZERH rate, document that all construction workers received prevailing wages as defined by Davis-Bacon.
Complete Form 8908
Attach Form 8908 (Energy Efficient Home Credit) to your federal income tax return for the year the home is sold or leased.
Carry Forward Unused Credits
Unused 45L credits can generally be carried back 1 year and forward 20 years under standard tax credit carryover rules.
Stack 45L with Compatible Programs
CFO Checklist
- 01Confirm the contractor (not the buyer) is the eligible person claiming the credit
- 02Obtain written Energy Star or ZERH certification before the home is sold or leased
- 03Document Davis-Bacon prevailing wage records if claiming the $5,000 ZERH rate
- 04Check 45L and 179D interaction — they may not be claimed on the same residential property
- 05File Form 8908 with the contractor's federal return for the tax year the unit is completed
Frequently Asked Questions
Who can claim the Section 45L credit?
Eligible contractors who build or substantially reconstruct qualified energy-efficient homes for sale or lease. This includes single-family homebuilders, multifamily developers, and manufactured housing contractors.
What is the 45L credit amount per unit in 2024?
The credit is $2,500 per unit for homes meeting Energy Star certification standards, and $5,000 per unit for homes meeting the Zero Energy Ready Home (ZERH) program requirements.
Does Section 45L apply to multifamily buildings?
Yes. Multifamily buildings are eligible under 45L. The IRA updated the standards so multifamily projects must meet Energy Star Multifamily New Construction certification ($500/unit) or DOE Zero Energy Ready Multifamily ($1,000/unit). Prevailing wage requirements apply for maximum rates.
Can 45L be stacked with state incentives?
Yes. Section 45L is a federal tax credit and can generally be stacked with state-level energy efficiency incentives, utility rebates, and LIHTC credits. However, some state programs reduce their benefit dollar-for-dollar when federal credits are claimed — always confirm stacking rules with a tax advisor.
What form is used to claim Section 45L?
Form 8908 (Energy Efficient Home Credit) is filed with the eligible contractor's federal income tax return. A third-party energy certification from a qualified certifier is required before claiming.