45L Energy Efficient Dwelling Developer Deduction Highlights
Developers can take immediate advantage from their new and past energy efficient building projects via this relatively new government policy. Qualified projects include condominium buildings, apartment buildings, single family home and manufactured housing developments that were constructed or renovated within the last 6 years. Deduction claims for eligible improvements must be certified by a qualified third party to consume reduced energy via their heating/ cooling systems and general envelope as shown by computer simulated dwelling performance.
Section 45L Details
The Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 extended the Energy Efficient Home Credit which allows developers of energy efficient residential buildings a significant federal tax deduction for the costs of installing certain energy efficient systems. The tax deduction offers up to $2000 per dwelling unit for energy efficient projects completed after August 8, 2005. This specifically applies to residential properties designed to consume less heating and cooling energy costs in comparison to ASHRAE 2004 standards.
Potential Benefits
The 45L tax break deduction amount is based solely the project’s number of dwelling units. Properties that benefit most have at least 10 units. Eligible buildings can have features ranging from simple energy efficient HVAC equipment and insulation retrofits to full-scale construction projects.
|
Number of Dwelling Units |
Allowable Tax Deduction |
|
|
50 |
$100K |
|
|
200 |
$400K |
|
|
500 |
$1M |
The Process
To claim this deduction, the property/business owner must conduct a detailed engineering analysis, as prescribed by the IRS. Our team of engineers, construction and green building experts will follow IRS guidance to ensure that you obtain the maximum allowable deductions that will withstand the scrutiny of an IRS audit. Blue Ray Engineering makes the process completely turn-key by providing a detailed report capturing the results of energy simulation modeling, certification, and inspection documents.
Find Out How You Can Benefit for FREE
Blue Ray Engineering offers a free feasibility assessment illustrating how you can benefit from the 45L deduction. To find out more or to get started on a feasibility assessment, contact us today.
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