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Wednesday 15 October 2014

FREQUENTLY ASKED QUESTIONS FOR BUILDERS ABOUT THE ENERGY EFFICIENCY TAX CREDITS FOR NEW HOMES

Posted by at 2:10 PM

FREQUENTLY ASKED QUESTIONS FOR BUILDERS ABOUT THE ENERGY EFFICIENCY TAX CREDITS FOR NEW HOMES

This post is presented to provide general information on the new federal tax credit and is not intended to be an interpretation of eligibility for the tax credit. Please consult with a qualified tax advisor to discuss eligibility.

Q: In general what allows a home to qualify for the tax credit?

A: To meet the energy saving requirements, a home must use no more than 50% of the energy used by a home built to 2006 International Energy Conservation Code (IECC) standards.

Q: Can multi-family homes be eligible for the tax credit?

A: Yes. The IRS defines all homes are eligible for the tax credit as long as the building is not more than three stories above grade in height.

Q: How does a builder determine if their homes will qualify for the tax credit?

A: The only way to determine if a home will qualify for the tax credit is to have an analysis done using one of the approved IRS software programs. To find the most current list of these programs, click on IRS Eligible Software Programs.

Q: Who can qualify for the new homes tax credit?

A: Under the provision for energy efficient homes tax credit, an eligible contractor who constructs a qualified new energy efficient home may qualify for the credit. For specific qualifications to be eligible for the tax credit please consult with a qualified tax advisor.

Q: What form must a builder complete the tax credit?

A: To claim the tax credit the eligible contractor must complete IRS form 8908. The tax form is posted on the IRS web site at www.irs.gov/pub/irs-pdf/f8908.pdf.

Q: Is the form complicated to complete?

A: No. An eligible contractor simply enters the total number of qualified energy homes meeting the 50% standard and multiples that amount by $2,000.

Q: What qualifies as a new energy efficient home?

A: The home qualifies for the credit if:

  • It is located in the United States;
  • Its construction is substantially completed after August 8, 2005;
  • It meets the statutory energy saving requirements, and
  • It is acquired from the eligible contractor after December 31, 2005, and before January 1, 2014, for use as a residence.