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The Inflation Reduction Act revised and extended the 45L Energy Efficient Tax Credit with the intent to reward builders striving to deliver more energy-efficient homes while achieving financial gain.
Here’s what you NEED to know:
- Transition Date
Beginning January 1, 2025, 47 states will transition from ENERGY STAR v3.1 to v3.2 requirements to be eligible for the 45L Tax Credit. - Lowering HERS® Target Score
On average, the HERS score needs be lowered by 10 points when transitioning from ENERGY STAR v3.1 to v3.2.- ENERGY STAR v3.1 had a typical score range of 65-55; v3.2 falls within the range of 55-45 points.
- Tax Credit Based on Acquisition Date
Homes built and completed but not sold or leased after January 1, 2025, must comply with ENERGY STAR v3.2 to be eligible for the 45L Tax Credit.