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The U.S. Department of Energy and the North Carolina Clean Energy Technology Center are excited to announce that a new, modernized DSIRE is under construction. The new version of DSIRE will offer significant improvements over the current version, including expanded data accessibility and an array of new tools for site users. The new DSIRE site will be available in December 2014. Staff are currently working hard on the new version of DSIRE but are also maintaining the content of the current version of DSIRE. Thank you for your continued support and patience during this transition. We hope you are as excited for December as we are!

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Incentives/Policies for Energy Efficiency

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Energy-Efficient New Homes Tax Credit for Home Builders   

Last DSIRE Review: 12/20/2014
Program Overview:
State: Federal
Incentive Type: Corporate Tax Credit
Eligible Efficiency Technologies: Comprehensive Measures/Whole Building
Applicable Sectors: Construction
Amount:$1,000 - $2,000 (depends on energy savings and home type)
Maximum Incentive:$2,000
Start Date:01/01/2006
Expiration Date:12/31/2014
Authority 1:
Date Enacted:
Expiration Date:
26 USC ยง 45L
08/08/2005 (subsequently amended)
12/31/2013
Authority 2:
Date Enacted:
Date Effective:
Expiration Date:
H.R. 8 (American Taxpayer Relief Act of 2012)
01/02/2013
01/02/2013
12/31/2013
Authority 3:
Expiration Date:
H.R. 5771
Tax Increase Prevention Act of 2014

12/31/2014
Summary:

NOTE: This credit expired at the end of 2013. The Tax Increase Prevention Act of 2014 retroactively renewed this tax credit effective January 1, 2014, expiring again on December 31, 2014. Any qualified home constructed and purchased in 2014 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 2014.

The home qualifies for the credit if:

  • It is located in the United States;
  • Its construction is substantially completed before December 31, 2014;
  • It meets the energy saving requirements outlined in the statute; and
  • It is acquired from the eligible contractor after December 31, 2013, and before January 1, 2015, 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. The bill was again rectroactively renewed by the the Tax Increase Prevention Act of 2014 (H.R. 5771) to December 31, 2014. 


 
Contact:
  Public Information - IRS
U.S. Internal Revenue Service
1111 Constitution Avenue, N.W.
Washington, DC 20224
Phone: (800) 829-1040
Web Site: http://www.irs.gov
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Disclaimer: The information presented on the DSIRE web site provides an unofficial overview of financial incentives and other policies. It does not constitute professional tax advice or other professional financial guidance, and it should not be used as the only source of information when making purchasing decisions, investment decisions or tax decisions, or when executing other binding agreements. Please refer to the individual contact provided below each summary to verify that a specific financial incentive or other policy applies to your project.

While the DSIRE staff strives to provide the best information possible, the DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. make no representations or warranties, either express or implied, concerning the accuracy, completeness, reliability or suitability of the information. The DSIRE staff, the N.C. Solar Center, N.C. State University and the Interstate Renewable Energy Council, Inc. disclaim all liability of any kind arising out of your use or misuse of the information contained or referenced on DSIRE Web pages.

Copyright 2013 - 2014 North Carolina State University, under NREL Subcontract No. XEU-0-99515-01. Permission granted only for personal or educational use, or for use by or on behalf of the U.S. government. North Carolina State University prohibits the unauthorized display, reproduction, sale, and/or distribution of all or portions of the content of the Database of State Incentives for Renewables and Efficiency (DSIRE) without prior, written consent.