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Builders of Energy-Efficient Homes may Qualify for a Valuable Tax Credit

Builders of Energy-Efficient Homes may Qualify for a Valuable Tax Credit

by Internal Revenue Service

Photo by Vivint Solar on Unsplash

Eligible contractors who build new energy-efficient homes or substantially reconstruct existing homes into qualified energy-efficient homes may be eligible for a tax credit of up to $5,000 per home. The exact amount of the credit depends on eligibility requirements, such as the type of home, the home’s energy efficiency, and the date when someone buys or leases the home.

Contractor eligibility

To claim the credit, contractors have to:

Home requirements

For a home to qualify, it must be:

Energy efficiency requirements and credit amounts: 2023 and after

For homes acquired through 2032, the credit amount ranges from $500 to $5,000, depending on the certification achieved and standards met, which include:

Energy efficiency requirements and credit amounts: Before 2023

For homes acquired before 2023, the credit amount is $1,000 or $2,000 depending on the standard met, which includes: 

For both standards, the home must be certified to meet applicable energy savings standards, including the Energy Star program requirements. Manufactured homes must also meet Federal Manufactured Home Construction and Safety Standards.

How to properly claim the credit

Eligible contractors must meet all requirements before claiming the credit. Eligible contractors should review the Instructions for Form 8908, Energy Efficient Home Credit, for full details about these requirements. They must also complete Form 8908, Energy Efficient Home Credit, and submit it with their tax return to claim the credit.

More information:

Credit for Builders of Energy-Efficient Homes
Credits and Deductions Under the Inflation Reduction Act of 2022