Energy-Efficient New Homes Tax Credit for Home Builders (Federal)

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Summary

Last modified on February 12, 2015.

Financial Incentive Program

Place United States

Name Energy-Efficient New Homes Tax Credit for Home Builders
Incentive Type Corporate Tax Credit
Applicable Sector Construction
Eligible Technologies Comprehensive Measures/Whole Building
Active Incentive Yes

Implementing Sector Federal
Energy Category Energy Efficiency Incentive Programs
Amount $1,000 - $2,000 (depends on energy savings and home type)







Start Date 2006-01-01
Expiration Date 2013-12-31






Maximum Incentive $2,000










Program Administrator U.S. Internal Revenue Service

Date added to DSIRE 2006-01-10
Last DSIRE Review 2013-01-03
Last Substantive Modification
to Summary by DSIRE
2013-01-03


References DSIRE[1]


Summary

This credit expired at the end of 2011. The American Taxpayer Relief Act of 2012 retroactively renewed this tax credit effective January 1, 2012, expiring again on December 31, 2013. Any qualified home constructed and purchased in 2012 or 2013 is eligible for this credit.

The federal Energy Policy Act of 2005 established tax credits of up to $2,000 for builders of all new energy-efficient homes, including manufactured homes constructed in accordance with the Federal Manufactured Homes Construction and Safety Standards. Initially scheduled to expire at the end of 2007, the tax credit was extended several times, and is now set to expire at the end of 2013.

The home qualifies for the credit if:

  • It is located in the United States;
  • Its construction is substantially completed after August 8, 2005;
  • It meets the energy saving requirements outlined in the statute; and
  • It is acquired from the eligible contractor after December 31, 2005, and before January 1, 2010, for use as a residence.

Energy Saving Requirements
Site-built homes qualify for a $2,000 credit if they are certified to reduce heating and cooling energy consumption by 50% relative to the International Energy Conservation Code (IECC) 2006 and meet minimum efficiency standards established by the Department of Energy. Building envelope component improvements must account for at least one-fifth of the reduction in energy consumption.

Manufactured homes qualify for a $2,000 credit if they conform to Federal Manufactured Home Construction and Safety Standards and meet the energy savings requirements of site-built homes described above. Manufactured homes qualify for a $1,000 credit if they conform to Federal Manufactured Home Construction and Safety Standards and reduce energy consumption by 30% relative to IECC 2006. In this case, building envelope component improvements must account for at least one-third of the reduction in energy consumption. Alternatively, manufactured homes can also qualify for a $1,000 credit if they meet Energy Star Labeled Home requirements.

Certification
The Internal Revenue Service (IRS) has issued guidance to provide information about the certification process that a builder must complete to qualify for the credit. The guidance also provides for a public list of software programs that may be used in calculating energy consumption for purposes of obtaining a certification.

IRS Notice 2006-27 provides guidance for the credit for building energy-efficient homes other than manufactured homes. IRS Notice 2006-28 provides guidance for the credit for building energy-efficient manufactured homes. Click here to access IRS Form 8908: Energy Efficient Home Credit.

For more information on this and other energy efficiency tax credits, visit the Energy Star web site.

Background
The federal Energy Policy Act of 2005 first established this tax credit. Initially scheduled to expire at the end of 2007, it was extended through 2008 by Section 205 of the Tax Relief and Health Care Act of 2006 (H.R. 6111), and then extended again through December 31, 2009 by Section 304 of The Energy Improvement and Extension Act of 2008 (H.R. 1424). The Tax Relief, Unemployment Insurance Reauthorization, and job Creation Act of 2010 (H.R 4853) again renewed the credit through December 31, 2011. After expiring at the end of 2011, the American Taxpayer Relief Act of 2012 retroactively renewed the cedit effective January 1, 2012, expiring again on December 31, 2013.


Incentive Contact

Contact Name Public Information - IRS
Department U.S. Internal Revenue Service

Address 1111 Constitution Avenue, N.W.

Place Washington, District of Columbia
Zip/Postal Code 20224
Phone (800) 829-1040



Website http://www.irs.gov
     
     

Authorities (Please contact the if there are any file problems.)

Authority 1: 26 USC § 45L
Date Effective 2006-01-01
Date Enacted 8/8/2005 (subsequently amended)
Expiration Date 2013-12-31

Authority 2: H.R. 8 (American Taxpayer Relief Act of 2012)
Date Effective 2013-01-02
Date Enacted 2013-01-02
Expiration Date 2013-12-31
















  • Incentive and policy data are reviewed and approved by the N.C. Solar Center's DSIRE project staff.[1]

References

  1. 1.0 1.1  "Database of State Incentives for Renewables and Efficiency (DSIRE)"