Last Updated January 27, 2021
Corporate Tax Credit
U.S. Internal Revenue Service
Eligible Renewable/Other Technologies:
Note: The Taxpayer Certainty and Disaster Tax Relief Act of 2020 extended this tax credit by one year. Any qualified homes constructed prior to January 1, 2022 are eligible for this credit. Homes constructed on or after January 1, 2022 are not 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 expired at the end of 2021.
The home qualifies for the credit if:
- It is located in the United States;
- Its construction is substantially completed before December 31, 2021;
- 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, 2022, 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.
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.