Title 26, Internal Revenue CodeRelease 119-110
§45L New Energy Efficient Home Credit
Title 26 › Subtitle A — Income Taxes › CHAPTER 1 — NORMAL TAXES AND SURTAXES › Subchapter A — Determination of Tax Liability › PART IV — CREDITS AGAINST TAX › Subpart D — Business Related Credits › § 45L
Summary
Gives eligible builders a tax credit for each new energy-efficient home they build and sell for use as a residence in the taxable year. The credit is $2,500 for a single-family or manufactured home that meets core Energy Star rules, or $5,000 if it meets the higher “zero energy ready” or equivalent standard. For units in Energy Star multifamily buildings the credit is $500 or $1,000, but those amounts rise to $2,500 or $5,000 if the builder pays prevailing local construction wages and follows related rules. Eligible contractor = the builder or the manufactured‑home producer. Qualified home = in the U.S., mostly finished after the law was enacted, and meeting the energy-saving rules. Energy rules = either DOE “zero energy ready” certification as of January 1, 2023 (or a successor) or the applicable Energy Star program requirements (specific versions and dates are set in the law). The credit needs written certification under Treasury guidance showing installed energy components and performance. If you take the credit, reduce the tax basis of the property by the credit amount. Costs already used under sections 47 or 48(a) can’t be claimed here. No credit for homes acquired after June 30, 2026.
Full Legal Text
Title 26, §45L
Internal Revenue Code, Source: USLM XML via OLRC
(a)Allowance of credit
(1)In general
For purposes of section 38, in the case of an eligible contractor, the new energy efficient home credit for the taxable year is the applicable amount for each qualified new energy efficient home which is—
(A)constructed by the eligible contractor, and
(B)acquired by a person from such eligible contractor for use as a residence during the taxable year.
(2)Applicable amount
For purposes of paragraph (1), the applicable amount is an amount equal to—
(A)in the case of a dwelling unit which is eligible to participate in the Energy Star Residential New Construction Program or the Energy Star Manufactured New Homes program—
(i)which meets the requirements of subsection (c)(1)(A) (and which does not meet the requirements of subsection (c)(1)(B)), $2,500, and
(ii)which meets the requirements of subsection (c)(1)(B), $5,000, and
(B)in the case of a dwelling unit which is part of a building eligible to participate in the Energy Star Multifamily New Construction Program—
(i)which meets the requirements of subsection (c)(1)(A) (and which does not meet the requirements of subsection (c)(1)(B)), $500, and
(ii)which meets the requirements of subsection (c)(1)(B), $1,000.
(b)Definitions
For purposes of this section
(1) Eligible contractor (2) Qualified new energy efficient home
(3)Construction
The term “construction” includes substantial reconstruction and rehabilitation.
(4)Acquire
The term “acquire” includes purchase.
(c)Energy saving requirements
(1)In general
(A)In general
A dwelling unit meets the requirements of this subparagraph if such dwelling unit meets the requirements of paragraph (2) or (3) (whichever is applicable).
(B)Zero energy ready home program
A dwelling unit meets the requirements of this subparagraph if such dwelling unit is certified as a zero energy ready home under the zero energy ready home program of the Department of Energy as in effect on January 1, 2023 (or any successor program determined by the Secretary).
(2)Single-family home requirements
A dwelling unit meets the requirements of this paragraph if—
(A)such dwelling unit meets—
(i)(I)in the case of a dwelling unit acquired before January 1, 2025, the Energy Star Single-Family New Homes National Program Requirements 3.1, or
(II)in the case of a dwelling unit acquired after December 31, 2024, the Energy Star Single-Family New Homes National Program Requirements 3.2, and
(ii)the most recent Energy Star Single-Family New Homes Program Requirements applicable to the location of such dwelling unit (as in effect on the latter of January 1, 2023, or January 1 of two calendar years prior to the date the dwelling unit was acquired), or
(B)such dwelling unit meets the most recent Energy Star Manufactured Home National program requirements as in effect on the latter of January 1, 2023, or January 1 of two calendar years prior to the date such dwelling unit is acquired.
(3)Multi-family home requirements
A dwelling unit meets the requirements of this paragraph if—
(A)such dwelling unit meets the most recent Energy Star Multifamily New Construction National Program Requirements (as in effect on either January 1, 2023, or January 1 of three calendar years prior to the date the dwelling was acquired, whichever is later), and
(B)such dwelling unit meets the most recent Energy Star Multifamily New Construction Regional Program Requirements applicable to the location of such dwelling unit (as in effect on either January 1, 2023, or January 1 of three calendar years prior to the date the dwelling was acquired, whichever is later).
(d)Certification
(1)Method of certification
A certification described in subsection (c) shall be made in accordance with guidance prescribed by the Secretary, after consultation with the Secretary of Energy. Such guidance shall specify procedures and methods for calculating energy and cost savings.
(2)Form
Any certification described in subsection (c) shall be made in writing in a manner which specifies in readily verifiable fashion the energy efficient building envelope components and energy efficient heating or cooling equipment installed and their respective rated energy efficiency performance.
(e)Basis adjustment
For purposes of this subtitle, if a credit is allowed under this section in connection with any expenditure for any property, the increase in the basis of such property which would (but for this subsection) result from such expenditure shall be reduced by the amount of the credit so determined. This subsection shall not apply for purposes of determining the adjusted basis of any building under section 42.
(f)Coordination with investment credit
For purposes of this section, expenditures taken into account under section 47 or 48(a) shall not be taken into account under this section.
(g)Prevailing wage requirement
(1)In general
In the case of a qualifying residence described in subsection (a)(2)(B) meeting the prevailing wage requirements of paragraph (2)(A), the credit amount allowed with respect to such residence shall be—
(A)$2,500 in the case of a residence which meets the requirements of subparagraph (A) of subsection (c)(1) (and which does not meet the requirements of subparagraph (B) of such subsection), and
(B)$5,000 in the case of a residence which meets the requirements of subsection (c)(1)(B).
(2)Prevailing wage requirements
(A)In general
The requirements described in this subparagraph with respect to any qualified residence are that the taxpayer shall ensure that any laborers and mechanics employed by the taxpayer or any contractor or subcontractor in the construction of such residence shall be paid wages at rates not less than the prevailing rates for construction, alteration, or repair of a similar character in the locality in which such residence is located as most recently determined by the Secretary of Labor, in accordance with subchapter IV of chapter 31 of title 40, United States Code.
(B)Correction and penalty related to failure to satisfy wage requirements
Rules similar to the rules of section 45(b)(7)(B) shall apply.
(3)Regulations and guidance
The Secretary shall issue such regulations or other guidance as the Secretary determines necessary to carry out the purposes of this subsection, including regulations or other guidance which provides for requirements for recordkeeping or information reporting for purposes of administering the requirements of this subsection.
(h)Termination
This section shall not apply to any qualified new energy efficient home acquired after June 30, 2026.
Legislative History
Notes & Related Subsidiaries
Editorial Notes
References in Text
The date of the enactment of this section, referred to in subsec. (b)(2)(B), is the date of enactment of Pub. L. 109–58, which was approved Aug. 8, 2005.
Amendments
2025—Subsec. (h). Pub. L. 119–21 substituted “
June 30, 2026” for “
December 31, 2032”. 2022—Subsec. (a)(2). Pub. L. 117–169, § 13304(b), amended par. (2) generally. Prior to amendment, par. (2) related to applicable amount for dwelling unit. Subsec. (c). Pub. L. 117–169, § 13304(c), amended subsec. (c) generally. Prior to amendment, subsec. (c) related to energy saving requirements of dwelling unit. Subsec. (e). Pub. L. 117–169, § 13304(e), inserted at end “This subsection shall not apply for purposes of determining the adjusted basis of any building under section 42.” Subsec. (g). Pub. L. 117–169, § 13304(d), added subsec. (g). Former subsec. (g) redesignated (h). Pub. L. 117–169, § 13304(a), substituted “
December 31, 2032” for “
December 31, 2021”. Subsec. (h). Pub. L. 117–169, § 13304(d), redesignated subsec. (g) as (h). 2020—Subsec. (g). Pub. L. 116–260 substituted “
December 31, 2021” for “
December 31, 2020”. 2019—Subsec. (g). Pub. L. 116–94 substituted “
December 31, 2020” for “
December 31, 2017”. 2018—Subsec. (g). Pub. L. 115–123 substituted “
December 31, 2017” for “
December 31, 2016”. 2015—Subsec. (g). Pub. L. 114–113 substituted “
December 31, 2016” for “
December 31, 2014”. 2014—Subsec. (g). Pub. L. 113–295 substituted “
December 31, 2014” for “
December 31, 2013”. 2013—Subsec. (c)(1)(A)(i). Pub. L. 112–240, § 408(b), substituted “2006 International Energy Conservation Code, as such Code (including supplements) is in effect on
January 1, 2006” for “2003 International Energy Conservation Code, as such Code (including supplements) is in effect on the date of the enactment of this section”. Subsec. (g). Pub. L. 112–240, § 408(a), substituted “
December 31, 2013” for “
December 31, 2011”. 2010—Subsec. (g). Pub. L. 111–312 substituted “
December 31, 2011” for “
December 31, 2009”. 2008—Subsec. (g). Pub. L. 110–343 substituted “
December 31, 2009” for “
December 31, 2008”. 2007—Subsec. (c)(2), (3). Pub. L. 110–172 substituted “part 3280” for “section 3280” in par. (2) and in introductory provisions of par. (3). 2006—Subsec. (g). Pub. L. 109–432 substituted “2008” for “2007”.
Statutory Notes and Related Subsidiaries
Effective Date
of 2022 Amendment Pub. L. 117–169, title I, § 13304(f), Aug. 16, 2022, 136 Stat. 1954, provided that: “(1) In general.—Except as provided in paragraph (2), the
Amendments
made by this section [amending this section] shall apply to dwelling units acquired after December 31, 2022. “(2) Extension of credit.—The
Amendments
made by subsection (a) [amending this section] shall apply to dwelling units acquired after December 31, 2021.”
Effective Date
of 2020 Amendment Pub. L. 116–260, div. EE, title I, § 146(b), Dec. 27, 2020, 134 Stat. 3055, provided that: “The amendment made by this section [amending this section] shall apply to homes acquired after December 31, 2020.”
Effective Date
of 2019 Amendment Pub. L. 116–94, div. Q, title I, § 129(b), Dec. 20, 2019, 133 Stat. 3232, provided that: “The amendment made by this section [amending this section] shall apply to homes acquired after December 31, 2017.”
Effective Date
of 2018 Amendment Pub. L. 115–123, div. D, title I, § 40410(b), Feb. 9, 2018, 132 Stat. 150, provided that: “The amendment made by this section [amending this section] shall apply to homes acquired after December 31, 2016.”
Effective Date
of 2015 Amendment Pub. L. 114–113, div. Q, title I, § 188(b), Dec. 18, 2015, 129 Stat. 3074, provided that: “The amendment made by this section [amending this section] shall apply to homes acquired after December 31, 2014.”
Effective Date
of 2014 Amendment Pub. L. 113–295, div. A, title I, § 156(b), Dec. 19, 2014, 128 Stat. 4022, provided that: “The amendment made by this section [amending this section] shall apply to homes acquired after December 31, 2013.”
Effective Date
of 2013 Amendment Pub. L. 112–240, title IV, § 408(c), Jan. 2, 2013, 126 Stat. 2342, provided that: “The
Amendments
made by this section [amending this section] shall apply to homes acquired after December 31, 2011.”
Effective Date
of 2010 Amendment Pub. L. 111–312, title VII, § 703(b), Dec. 17, 2010, 124 Stat. 3311, provided that: “The amendment made by this section [amending this section] shall apply to homes acquired after December 31, 2009.”
Effective Date
Section applicable to qualified new energy efficient homes acquired after Dec. 31, 2005, in taxable years ending after such date, see section 1332(f) of Pub. L. 109–58, set out as an
Effective Date
of 2005
Amendments
note under section 38 of this title.
Reference
Citations & Metadata
Citation
26 U.S.C. § 45L
Title 26, Internal Revenue Code
Last Updated
Sep 22, 2026
Release point: 119-110